• Durable goods orders forecast to drop sharply in February
  • Business capital spending expected to decline from January
  • Weak retail sales could be a warning

The US Census Bureau will release its manufacturers' new orders for durable goods report for February on Tuesday April 2nd at 8:30 am EDT, 12:30 GMT.


New orders for durable goods are predicted to fall 1.8% in February following January’s revised 0.3% increase.  Orders outside of the transportation sector are expected to rise 0.2% following January's adjusted 0.2% drop. Business orders, the Census Bureau's non-defense capital goods minus aircraft, is projected to be flat after January’s 0.8% increase. Durable goods ex-Defense Department procurement is forecast to rise 0.1% in February following January's 0.7% gain. 

Retail Sales and Durable Goods

Durable goods are a category of retail sales limited to items designed to last three or more years in normal use. The series tracks a wide range of products manufactured for the consumer and industry.  From aircraft to lawn mowers, from cellphones, sewing machines and bicycles, to shoes, motorcycles and jet engines, durable goods orders provide a monthly picture of household consumption and business investment in the economy. 

Retail sales have had a volatile three months. Overall sales were unexpectedly down 1.6% in December and then up 0.7% in January both figures which may have been related to reporting issues around the government shutdown from late December to late January. February’s numbers released on April 1st at -0.2%, missed the 0.3% consensus forecast.

The control group, which is the GDP component for consumption was down 2.3% in December, up 1.7% in January and off 0.2% in February, also missing its 0.4% forecast.

The spread from forecast to final revision in the December and January statistics has been wide. In December retail sales were expected to be up 0.2%, the revised final figure was -1.6%, the control group was forecast to be 0.4%, the revision was -2.3%. January retail sales were predicted to be flat; the final figure was 0.7%, the control group forecast was 0.6%, the revision 1.7%.

February’s statistics, released on April 1st continued the disparity. Sales were -0.2% on a 0.3% forecast and the control group came in at -0.2% on a 0.4% prediction.

Durable Goods

Durable goods have been less erratic, rising 1.2% and 0.3% in December and January. The ex-transport category, orders without the aircraft business of Boeing Company of Chicago, has been stable rising 0.1% in December and falling 0.2% in January.  Orders minus defense procurement were up 1.8% in December, and 0.7% in January. The control group or non-defense capital goods excluding aircraft an often used proxy for business investment spending was down 0.7% in December and up 0.8% in January.


Overall durable goods orders for February are forecast to drop 1.8% largely on expectations for Boeing’s order book.  The ex-transportation forecast at 0.2% is not far from January’s 0.2% decline and December’s 0.1% gain. The control group’s flat prediction is mid-way between January’s 0.8% increase and December’s 0.7% fall.



The relative weakness in the February retail sales figures, missing forecasts by 0.5% in the overall number, and 0.6% in the control group might argue for lowering expectations in its sub-category of durable goods. But the large upward revision in the January sales numbers and the potential for positive adjustments to February’s results bring the balance to neutral.  On the other hand a better performance in the February durable statistics is a strong hint that the retail numbers are understated.

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