Data from the U.S. Commerce Department showed that core capital goods orders, which measure equipment investment and exclude commercial aircraft and military equipment, increased by 0.6% in December, surpassing the expected 0.3%. Total durable goods orders declined by 1.4%, primarily reflecting a reduction in aircraft orders, yet still performed better than anticipated. The growth in orders was broad-based, with categories closely linked to artificial intelligence infrastructure again leading the gains.
New orders for business equipment in the United States rose more than expected in December, indicating robust capital investment at the end of last year as uncertainties surrounding trade policy gradually eased.
Figures released by the Commerce Department on Wednesday revealed that core capital goods orders, a key gauge of equipment investment excluding commercial aircraft and military hardware, climbed 0.6% for the month. This follows a revised November increase of 0.8%, double the initially reported growth. The median estimate from a survey of economists had projected a 0.3% rise for December.
Total durable goods orders—defined as products with a lifespan of at least three years—fell by 1.4%, largely due to decreased aircraft orders, but still came in above forecasts. Boeing reported receiving more aircraft orders in December than in the previous month, although government data does not always align perfectly with the company's monthly figures. Excluding transportation equipment, orders posted their largest increase since September 2024.
Meanwhile, shipments of non-defense capital goods, which include aircraft, advanced by 1.8%. This metric feeds directly into the equipment investment component of the Gross Domestic Product (GDP) report. Unlike orders, which can be canceled, the government uses shipment data for GDP calculations.
Economists anticipate a rebound in business investment this year, as firms take advantage of tax provisions included in the legislation passed last year. Furthermore, investment related to artificial intelligence is expected to remain strong.
The durable goods report indicated widespread order growth across categories including communications equipment, computers, metals, electrical equipment, and machinery. Motor vehicle orders recorded their largest gain since June. Commenting on the latest figures, an analyst noted, "The increase was broad-based, but categories closely tied to AI infrastructure were once again at the forefront."
The report also showed that core capital goods shipments, which exclude aircraft and military equipment and serve as a less volatile measure of business investment, rose 0.9% in December. On an annualized basis, core capital goods shipments increased by 8.2% over the final three months of last year.
Economists favor core equipment shipment and order data as these indicators provide a clearer picture of underlying trends in business investment and their impact on the economy.
For the full year 2025, durable goods orders increased by 7.8% compared to the previous year, marking the largest annual gain since 2022. The value of core capital goods orders grew by 3.5%, also the strongest rise in three years.
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