U.S. Durable Goods Orders Rose 0.3% in June, Lagging Expectations

New orders for durable goods in the U.S. climbed 0.3% in June, a figure that includes revisions from prior months. This fell short of the 1.8% increase anticipated by economists. Excluding the volatile transportation sector, orders advanced a stronger 0.6% in June, also including revisions, compared to the expected 0.8% rise. Overall, new orders are up 7.4% from a year ago, with orders excluding transportation showing a more robust 11.0% annual increase.

The increase in June orders was primarily driven by gains in computers & electronic products, commercial aircraft, and primary metals. While the headline number appeared modest, underlying activity remains solid. Transportation orders are known for their monthly fluctuations, making orders excluding transportation a more reliable indicator of broader economic health. This measure continues its upward trend, with the 11.0% annual gain representing the largest in over four years. Significant contributions to this increase came from computers & electronic products (+3.1%), primary metals (+1.1%), and electrical equipment (+0.9%).

Notably, orders for computers & electronic products have expanded at an annualized rate of 23.8% through the first half of 2026, a pace second only to primary metals, which increased 28.0% over the same period. While orders for fabricated metal products and industrial machinery saw declines last month, they are up 10.6% and 14.4% respectively over the past year, indicating sustained growth in these sectors.

Perhaps the most significant insight from the June release comes from core shipments—an important component for calculating business investment in gross domestic product (GDP). This measure, specifically shipments of non-defense capital goods excluding aircraft, surged 1.9% in June and recorded an 11.1% annualized growth rate in the second quarter compared to the first quarter average. Business investment has shown consistent strength recently due to a favorable tax environment and substantial capital expenditures for new data centers. The enormous spending by hyperscale companies, projected to reach nearly $700 billion this year, has provided a significant boost to GDP over the past two quarters and could continue to support economic growth if this spending momentum is maintained. Unfilled orders for durable goods also rose 0.6% in June and are up 8.2% over the past year, further suggesting ongoing demand.

Key terms:

1. **Durable Goods:** Products designed to last for three years or more, such as cars, appliances, and machinery.

2. **Capital Goods:** Long-lasting goods used by businesses to produce other goods and services, including machinery, equipment, and buildings.

3. **Gross Domestic Product (GDP):** The total monetary value of all finished goods and services produced within a country's borders in a specific time period, used as a broad measure of economic health.