Durable Goods Orders Fall 4.5% in May; Core Capex Orders Rise 1.6%

New orders for manufactured durable goods fell 4.5 percent in May to $332.1 billion, surrendering most of April's 8.5 percent gain and ending a two-month run of increases. The reversal was concentrated almost entirely in a single category: transportation equipment orders dropped 14.0 percent to $113.5 billion after a 22.4 percent April surge. Excluding transportation, new orders rose 1.3 percent, extending gains for a third consecutive month, and nondefense capital goods orders excluding aircraft — the series that feeds the equipment investment line of the national accounts — rose 1.6 percent to $84.0 billion.

Aircraft Orders Gave Back April's Spike

The line item behind the headline decline is nondefense aircraft and parts, where new orders fell 51.8 percent to $17.8 billion after jumping 167.4 percent to $37.0 billion in April, itself a rebound from $13.8 billion in March. Orders in this category are booked in lumps: a handful of wide-body commitments can move a month by tens of billions of dollars and say nothing about the operating conditions manufacturers face.

The rest of transportation held firm. Motor vehicles and parts orders rose 1.1 percent to $73.4 billion, and defense aircraft and parts rose 7.9 percent to $7.0 billion.

Defense capital goods, a separate category rather than a component of transportation equipment, also declined on the month. Its direction offers no relief to the headline: excluding defense, new orders still fell 4.6 percent, which places the weakness squarely in nondefense aircraft rather than in military procurement.

Core Capital Goods Orders Advanced

Nondefense capital goods orders excluding aircraft rose 1.6 percent to $84.0 billion, recovering from a 0.7 percent April dip that followed a 3.8 percent increase in March. Year to date, orders in this category total $405.7 billion against $374.8 billion in the same period of 2025, an increase of 8.3 percent.

The broader capital goods aggregates tell the opposite story, and only because of aircraft. Total nondefense capital goods orders fell 15.7 percent to $96.1 billion, and all capital goods orders fell 13.6 percent to $118.3 billion. The gap between those declines and the ex-aircraft gain is the clearest illustration in this report of why the headline aggregate is the wrong series to read for business investment intent.

Shipments of nondefense capital goods excluding aircraft — the line that converts into measured equipment investment rather than intent — rose 0.3 percent to $81.4 billion and stand 6.7 percent above their year-to-date level of a year ago.

Breadth Beneath the Headline

Away from transportation, order books widened across the major durable goods industries in May. Primary metals, machinery and fabricated metal products all added orders on the month, as the sector chart sets out. Beyond the categories plotted there, the advance ran wider still:

• Motor vehicles and parts: new orders rose 1.1 percent to $73.4 billion
• All other durable goods: rose 0.8 percent to $50.9 billion
• Computers and electronic products: rose 0.3 percent to $29.9 billion
• Electrical equipment, appliances, and components: rose 0.3 percent to $18.4 billion

Among the major industry groupings, transportation equipment was the only decline. That distribution matters for how the month should be read: a headline drop driven by one lumpy category alongside gains everywhere else describes a timing artifact, not a demand shock.

Shipments and Backlogs Kept Building

Shipments of manufactured durable goods rose 1.0 percent to $327.9 billion, an eighth increase in nine months, with transportation equipment shipments up 1.4 percent to $109.5 billion. Year to date, shipments total $1,580.2 billion against $1,469.1 billion a year earlier, a 7.6 percent increase.

Unfilled orders rose 0.6 percent to $1.6 trillion, a run that now covers twenty-two of the last twenty-three months, with transportation equipment backlogs up 0.4 percent to $997.8 billion. On an unadjusted basis the backlog sits 8.7 percent above its year-earlier level. A backlog that keeps building while monthly orders swing carries more information than the orders line itself: manufacturers holding unfilled orders are working through a production pipeline that insulates near-term output from one weak booking month.

Inventories rose 0.2 percent to $600.0 billion, an eighth consecutive increase, with primary metals leading the gain.

What This Means for Equipment Investment

Equipment investment is a modest share of GDP but carries outsized cyclical signal, and this report points toward expansion rather than retrenchment. Core capital goods orders rose, core capital goods shipments rose, and the order backlog grew — three independent lines pointing the same direction. The headline's 4.5 percent decline reflects the timing of aircraft bookings, not a change in the willingness of businesses to commit capital.

Two cautions temper that read. The strength is concentrated in metals and machinery rather than evenly distributed, and one month of core capital goods orders is a noisy signal on its own. The three-month path — up 3.8 percent, down 0.7 percent, up 1.6 percent — is better described as advancing unevenly than as accelerating.

Revisions and Methodology

Revised April figures for all manufacturing industries put new orders at $665.8 billion, up from the $662.7 billion first reported, with shipments at $642.8 billion and total inventories at $959.8 billion. The revision is small enough to leave April's trajectory unchanged.

Two methodology points bear on how the coming months should be compared. Revised historical data and the seasonal adjustment models for this survey will remain unchanged for the remainder of 2026, so month-to-month comparisons through year-end rest on the current model vintage rather than a re-estimated one. New and unfilled orders figures also exclude semiconductor manufacturing, which shifts where semiconductor demand shows up in the industry detail.

The June advance report is scheduled for July 27, 2026, with revised and more detailed estimates including nondurable industries on July 2. The figure that will settle the question is nondefense capital goods orders excluding aircraft: holding at or above the May level of $84.0 billion would confirm that the first-half capital spending expansion carried through midyear, while a second decline in three months would mark the ex-aircraft trend as flattening rather than advancing — and would matter considerably more than another aircraft-driven swing in the headline.