U.S. durable goods orders unexpectedly fell 2.2% month-on-month in December, with a significant decrease in aircraft orders

The data released by the U.S. Department of Commerce on Tuesday showed that orders for business equipment in December grew more than expected, but overall durable goods orders continued to decline from November due to a significant drop in aircraft orders, falling again in December and missing expectations. Durable goods refer to items with a lifespan of at least three years. The related data is not adjusted for inflation. The preliminary month-on-month change in overall durable goods orders in the U.S. for December was a decline of 2.2%, the largest drop since June of last year, missing the expected increase of 0.6%. The previous value for November was revised from a month-on-month decline of 1.2% to a decline of 2%. Orders for non-defense aircraft and parts plummeted 45.7% month-on-month in December. The preliminary month-on-month change in orders for durable goods excluding transportation items such as aircraft in December was an increase of 0.3%, in line with expectations of 0.3%, while the previous value for November was a month-on-month decline of 0.2%. The preliminary month-on-month change in orders for non-defense capital durable goods excluding aircraft in December was an increase of 0.5%, higher than the expected 0.3%. The previous value for November was revised from a month-on-month increase of 0.4% to 0.9%. This portion of orders, also known as core capital goods orders, is an indicator of business equipment investment, excluding the more volatile aircraft and military equipment orders. The shipment volume of core capital goods in December increased by 0.6%, the highest growth rate in nearly a year. This latest data will help economists adjust their estimates of business equipment spending in the U.S. GDP for the fourth quarter. This data will be released on Thursday. Before the report was published, the GDPNow forecast from the Atlanta Federal Reserve had expected business equipment spending to drag down U.S. GDP growth by 0.19 percentage points in the fourth quarter. Including aircraft, the shipment volume of non-defense capital goods surged by 3.5%. Despite high borrowing costs and market expectations that the Federal Reserve will reduce interest rate cuts in 2025, corporate confidence in long-term investments has increased following the U.S. presidential election. Some companies also indicated that part of the business demand was released in advance before the Trump administration might implement new tariffs. After the release of the durable goods orders data for December, the U.S. dollar index and U.S. stock futures showed little short-term volatility: The U.S. dollar index showed little short-term volatility, reported at 107.93. U.S. stock futures dipped slightly, with the Nasdaq 100 index futures narrowing their gains to 0.3%. The yield on the U.S. 10-year Treasury bond showed little short-term volatility, reported at 4.557%. Spot gold rose about $2 in the short term, reported at $2,749 per ounce