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Economy

The U.S. Census Bureau reported that new orders for manufactured durable goods fell 1.4% in December to $319.6 billion, following a 5.4% increase in November. The decline was driven by transportation equipment, where orders dropped $6.4 billion (-5.3%) to $113.5 billion, reflecting a pullback in nondefense aircraft and parts, which fell 24.9% in December after surging 98.2% in November. Orders excluding transportation rose 0.9%, signaling underlying strength across other categories, including machinery (+0.3% to $40.3 billion), fabricated metal products (+0.9% to $42.6 billion), and computers and electronic products (+3.0% to $27.9 billion). Shipments increased 1.0% to $311.5 billion, supported by transportation equipment shipments (+1.5%), while unfilled orders rose 0.9% to $1.53 trillion and inventories edged up 0.2% to $593.2 billion. Core capital goods orders (nondefense, excluding aircraft) increased 0.6% to $79.0 billion, with shipments up 0.9% to $78.7 billion, pointing to continued momentum in business investment.

The Federal Reserve’s January 27–28, 2026, FOMC minutes showed that policymakers viewed the economy as expanding at a solid pace, even as inflation remained somewhat elevated. The Committee left the federal funds rate unchanged at 3½ to 3¾ percent, noting the current policy stance was within the range of estimates of the neutral level. Labor market conditions showed signs of stabilization despite low job gains, while elevated core goods inflation, which was largely attributed to tariffs, underscored a careful approach to future policy adjustments. Relative to the December meeting, where the Committee lowered the target range by ¼ percentage point due to rising downside employment risks, the January discussion highlighted that these risks had diminished and come into better balance.

The Commerce Department’s initial estimate for fourth-quarter gross domestic product (GDP) showed the economy expanded at a seasonally adjusted annual rate of 1.4%, a sharp slowdown from 4.4% in the prior quarter. Consumer spending rose 2.4%, contributing about 1.6 percentage points to growth, while gross private domestic investment increased 3.8%, adding roughly 0.7 points, driven by a 7.4% gain in intellectual property products and a 3.2% rise in equipment spending. These gains were partly offset by a 5.1% decline in government spending, which subtracted about 0.9 percentage points from GDP, and a 0.9% drop in exports, reducing growth by roughly 0.1 point. Imports fell 1.3%, adding around 0.2 points and partially offsetting the export drag. Inflation pressures firmed, with the gross domestic purchases price index rising 3.7%, while the PCE price index increased 2.9% and core PCE eased to 2.7%. Underlying demand moderated as real final sales to private domestic purchasers rose 2.4%, down from 2.9%, indicating a cooling but still expanding economy.

Upcoming Economic Reports:

Tuesday February 24 – Consumer Confidence (February)

Friday February 27 – PPI (MoM) (January)

Earnings Calendar: