US Durable Goods Orders Plunge in January, Reflecting Unprecedented Volatility

US Durable Goods Orders Plunge in January, Reflecting Unprecedented Volatility 

The recent months have seen notable volatility in US durable goods orders, particularly evident in the preliminary January data, which revealed a significant 6.1% month-over-month decline in headline orders. 

This drop exceeded the already pessimistic expectation of a 5% decrease, marking the most substantial month-over-month downturn since the peak of the COVID lockdowns in April 2020. Consequently, year-over-year orders growth dipped to -0.8%, the lowest level and first annual contraction since August 2020.

Excluding transportation equipment, orders experienced a more modest 0.3% decline. Notably, non-defense aircraft orders suffered a sharp 58.5% month-over-month decrease, the worst performance since 2019, while increased war-related spending partially offset this decline with a 24.2% month-over-month rise.

Furthermore, core capital goods shipments, a critical indicator used to gauge equipment investment in the government's gross domestic product report, rebounded following a contraction in December.