US Durable Goods Orders ex Defense MoM: September 2025 Analysis
The US Durable Goods Orders ex Defense surged 1.90% MoM in September, sharply rebounding from August’s -2.50%. This marks a notable turnaround after four consecutive months of declines, signaling potential stabilization in manufacturing demand. Monetary tightening and geopolitical tensions remain key risks, but fiscal support and easing supply constraints could sustain momentum. Market reaction was mixed, reflecting cautious optimism amid persistent macro uncertainties.
Table of Contents
The US durable goods sector, excluding defense, posted a 1.90% month-over-month increase in September 2025, according to the latest data from the Sigmanomics database. This contrasts sharply with the prior month’s -2.50% decline and outperforms the consensus estimate of -0.40%. Historically, this is a significant rebound following a string of negative prints, including a -9.40% drop in July and August and a -2.30% decline in June. The 12-month average growth rate stands near -0.70%, underscoring the recent volatility in this key manufacturing gauge.
Drivers this month
- Stronger orders in transportation equipment, particularly commercial vehicles, contributed 0.90 percentage points.
- Non-defense capital goods excluding aircraft rose 1.20%, reflecting renewed business investment.
- Supply chain improvements eased delays, supporting order fulfillment.
Policy pulse
This reading arrives amid ongoing Federal Reserve tightening, with the Fed funds rate near 5.50%. The rebound suggests some resilience in manufacturing despite tighter financial conditions. However, inflation remains above the 2% target, keeping the Fed cautious.
Market lens
Immediate reaction: The US dollar index (DXY) edged up 0.15% post-release, while 2-year Treasury yields rose 5 basis points, reflecting hawkish sentiment. Equity markets showed mixed responses, with industrial stocks gaining modestly.
Durable goods orders ex defense serve as a vital barometer of business investment and manufacturing health. The 1.90% MoM rise in September contrasts with the steep declines seen earlier this year, including a 7.50% drop in May and June. The volatility reflects shifting demand amid inflationary pressures and supply chain disruptions.
Monetary policy & financial conditions
The Federal Reserve’s restrictive stance has tightened credit availability, pressuring capital expenditures. Yet, the rebound in durable goods orders suggests some firms are adjusting to higher borrowing costs and resuming investment plans.
Fiscal policy & government budget
Federal infrastructure spending and targeted tax incentives continue to support manufacturing demand. The recent bipartisan infrastructure bill, effective since mid-2025, likely underpins the uptick in non-defense capital goods orders.
External shocks & geopolitical risks
Ongoing geopolitical tensions, including trade frictions with China and supply chain uncertainties from Eastern Europe, remain downside risks. However, recent easing in semiconductor shortages and energy price stabilization have helped improve manufacturing conditions.
Drivers this month
- Transportation equipment orders increased 3.20%, contributing 0.90 percentage points to the overall gain.
- Non-defense capital goods excluding aircraft rose 1.20%, reflecting stronger business investment.
- Durable goods excluding defense and aircraft improved 1.50%, indicating broader industrial strength.
This chart highlights a clear reversal from a multi-month contraction to renewed growth in durable goods orders ex defense. The upward trend suggests improving business confidence and easing supply constraints, which could support broader economic expansion if sustained.
Policy pulse
The rebound occurs despite the Federal Reserve’s ongoing rate hikes, suggesting some sectors are absorbing tighter monetary conditions. However, inflationary pressures and geopolitical risks could temper future gains.
Market lens
Immediate reaction: US Treasury yields rose modestly, with the 2-year note climbing 5 basis points, reflecting expectations of continued Fed tightening. The US dollar strengthened slightly, while industrial sector equities gained on the positive data.
Looking ahead, durable goods orders ex defense face a mixed outlook shaped by macroeconomic and geopolitical factors. The rebound in September could mark the start of a stabilization phase, but risks remain elevated.
Bullish scenario (30% probability)
- Supply chain normalization accelerates, boosting manufacturing output.
- Fiscal stimulus from infrastructure projects drives sustained capital spending.
- Inflation moderates, allowing the Fed to pause rate hikes, easing financial conditions.
Base scenario (50% probability)
- Moderate growth continues with durable goods orders fluctuating around 0.50% MoM.
- Fed maintains restrictive policy to contain inflation, limiting upside.
- Geopolitical tensions persist but do not escalate materially.
Bearish scenario (20% probability)
- Inflation surprises on the upside, prompting further Fed tightening.
- Geopolitical shocks disrupt supply chains and dampen demand.
- Corporate investment stalls amid rising borrowing costs and economic uncertainty.
Structural & long-run trends
Long-term trends include automation and reshoring of manufacturing, which may gradually increase durable goods orders. However, demographic shifts and global competition could cap growth rates. The recent volatility underscores the sector’s sensitivity to macro shocks.
The 1.90% rebound in US durable goods orders ex defense in September 2025 signals tentative stabilization after a challenging first half of the year. While monetary tightening and geopolitical risks remain headwinds, improving supply chains and fiscal support provide a foundation for moderate growth. Market participants should watch upcoming inflation data and Fed communications closely, as these will shape the trajectory of business investment and manufacturing demand.
Key Markets Likely to React to Durable Goods Orders ex Defense MoM
The durable goods orders ex defense indicator is closely watched by markets sensitive to US manufacturing and investment trends. Key symbols historically tracking this data include:
- BA – Boeing’s stock is highly correlated with durable goods orders in transportation equipment.
- USDCAD – The USD/CAD pair reacts to shifts in US manufacturing strength and commodity demand.
- BTCUSD – Bitcoin often reflects risk sentiment linked to economic data surprises.
- CAT – Caterpillar’s stock tracks capital goods orders and industrial activity.
- EURUSD – The euro-dollar exchange rate is sensitive to US economic data and Fed policy shifts.
Indicator vs. BA Stock Price Since 2020
Since 2020, BA stock price movements have closely mirrored durable goods orders ex defense trends. Periods of rising orders, such as the May 2025 10.50% surge, corresponded with strong BA rallies. Conversely, sharp drops in orders during mid-2025 aligned with BA price declines. This correlation underscores the sensitivity of aerospace manufacturing to durable goods demand fluctuations.
FAQs
- What is Durable Goods Orders ex Defense MoM?
- This monthly measure tracks new orders for long-lasting manufactured goods excluding defense-related items, indicating business investment trends.
- Why is this data important for the US economy?
- It reflects manufacturing health and capital spending, key drivers of economic growth and employment.
- How does this indicator affect monetary policy?
- Strong orders may signal inflationary pressures, influencing the Federal Reserve’s interest rate decisions.
Takeaway: The September rebound in durable goods orders ex defense offers cautious optimism for US manufacturing, but persistent macro risks warrant close monitoring.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The September durable goods orders ex defense rose by a 1.90% MoM, reversing August’s -2.50% decline and outperforming the 12-month average of -0.70%. This rebound follows a volatile period marked by sharp contractions in mid-2025, including a -9.40% slump in July and August. The data signals a potential inflection point in manufacturing demand.
Compared to the previous six months, the current print is the first positive monthly gain since May’s 10.50% surge, which was driven by post-pandemic restocking. The recent improvement is broad-based, with transportation equipment and non-defense capital goods leading the gains.