In September 2024, U.S. durable goods orders dropped by 0.8%, or $2.2 billion, reaching a total of $284.8 billion. This follows a similar 0.8% decline in August, reflecting a cooling in manufacturing demand. The decrease came slightly better than market predictions of a 1% drop, signaling mixed reactions in the sector. The primary factor behind this downturn was the transportation equipment category, which has now seen declines in three of the past four months.

Transportation and Capital Goods See Sharp Declines

Transportation equipment, a major driver in the durable goods category, decreased by $3.1 billion or 3.1%, falling to $95.4 billion. This marks another month of cooling in this sector, which is often volatile due to the large-value items it represents. Orders also dropped across other key sectors, including machinery (-0.2%), computers and electronic products (-0.3%), and capital goods (-2.8%), signaling a broader slowdown in manufacturing.

Bright Spot in Business Investment Amid Broader Weakness

On a brighter note, business investment showed resilience in September. Non-defense capital goods orders excluding aircraft—a closely watched indicator of business spending—rose by 0.5%, beating market forecasts of a 0.1% increase. This gain follows a 0.3% rise in August, indicating steady demand in areas not reliant on transportation or defense. This improvement suggests that, while certain sectors are cooling, businesses are continuing to invest, pointing to potential recovery momentum in the months ahead.