American factories received a steady flow of orders in August, offering a counterpoint to gloomy readings on consumer confidence and a reminder that parts of the US economy remain resilient despite high interest rates and energy costs.
New orders for manufactured durable goods, items designed to last three years or more such as machinery, electronics, appliances, vehicles and aircraft, were essentially unchanged in August at $338.6 billion, according to the Census Bureau's advance report released on Friday, September 25. That followed a 0.9 per cent increase in July.
A flat reading may sound unremarkable. But economists had expected a decline of about 0.3 per cent, so the result was better than forecast.
Beneath the headline
The more revealing numbers came from the report's details, which strip out volatile categories to give a clearer view of underlying demand.
Orders excluding transportation rose 0.3 per cent, according to data compiled by MarketScreener. That was below economists' expectations of a 0.6 per cent increase and slower than July's 0.7 per cent gain.
Orders excluding defense rose 0.1 per cent.
The strongest signal came from orders excluding both transportation and defense, which rose 1.6 per cent. Zacks Equity Research noted that this measure of core business spending came in at "+1.6%, more than triple the +0.5% analysts were expecting."
Transportation equipment was the weak spot. Orders in that category fell 0.6 per cent, or $0.7 billion, to $114.1 billion, marking declines in three of the past four months. Transportation orders are often driven by large, irregular aircraft purchases, which is why economists typically exclude them when assessing underlying trends.
Why business investment matters
Durable goods orders are closely watched as an indicator of business investment. When companies order machinery, computers and other equipment, they are signalling confidence in future demand and a willingness to expand capacity.
The 1.6 per cent rise in orders excluding transportation and defense suggests that, despite high borrowing costs, many businesses are still investing. That is consistent with broader evidence of heavy spending on technology, data centres and AI infrastructure, which has been one of the main drivers of US economic activity this year.
Business investment has become particularly important as consumers show signs of strain. On the same day, the University of Michigan reported that consumer sentiment fell to 48.1 in September, below its level at the start of every US recession since the survey began. If households cut back on spending, investment by businesses will play a larger role in determining whether the economy continues to grow.
A tale of two economies
Friday's data captures the unusual shape of the US economy in 2026. Consumer confidence is weak, inflation expectations have risen and borrowing costs are at their highest in nearly two decades. Yet companies continue to order equipment, the stock market sits near record highs and parts of manufacturing are adding jobs.
According to a Brushwood Media Network report on the data, manufacturing employment has increased by about 43,000 jobs since May, after the sector lost roughly 68,000 jobs in 2025. That recovery, while modest, suggests that some producers are seeing enough demand to hire.
