Durable Goods OrdersM3
Durable goods orders measure new orders for products meant to last three years or more, such as machinery, vehicles and aircraft. The figure is volatile, so analysts often watch the version excluding transportation.
Durable goods orders track new orders placed with US factories for long-lasting products such as machinery, computers and aircraft. Because orders come before production, the report is watched as an early signal for manufacturing and business investment. It is volatile, so analysts focus on versions that strip out lumpy items like aircraft.
- Category
- Fundamentals and Macroeconomics
- Reading time
- 3 min
- Also called
- Durable goods report, Manufacturers' new orders for durable goods, Advance durable goods
- Updated
Durable goods orders in plain words
Durable goods are physical products that can be stored and are expected to last at least three years on average.1
The orders figures come from the Census Bureau's M3 survey, published four to six weeks after the month they cover; they show quantities like orders, shipments and inventories, but no prices.2
The headline series is published on FRED as Manufacturers' New Orders: Durable Goods (DGORDER).3
How to read the report
Know what counts
Know what counts: goods built to last three years or more.1
Note the timing
Remember the lag — the data arrive four to six weeks after the month ends.2
Read the headline
Check the month-on-month change in the headline series, Manufacturers' New Orders: Durable Goods (DGORDER).3
Strip out lumpy items
Strip out defence, civilian aircraft and car parts to see the steadier core trend.4
Compare with surveys
Compare with the ISM manufacturing survey, which comes out on the first business day of the month and gives an earlier read.2
Watch revisions
The advance figure is revised in the full factory report, so treat it as preliminary.
Worked examples
Example 1 — Aircraft swing
Trend is flatHypothetical headline orders jump 4%, but excluding aircraft they rise 0.3%.
| Headline | +4% |
| Ex aircraft | +0.3% |
The headline jump came from volatile categories; the core series, without defence, aircraft and car parts, rose only modestly.4
Example 2 — Signal for output
Production likely upHypothetical adjusted orders rise for 3 straight months.
| Month 1 | +0.8% |
| Month 2 | +0.6% |
| Month 3 | +0.9% |
A steady rise in core orders points to higher production in the months ahead.4
Example 3 — Timing gap
Surveys leadA hypothetical PMI drops sharply on the first business day; the orders report arrives weeks later.
| PMI | Early signal |
| Orders data | Weeks later |
Because the report arrives weeks after the month ends, markets often react to faster surveys first.2
Headline vs core orders
| Aspect | Headline orders | Ex-transportation / core |
|---|---|---|
| Includes aircraft | Yes | No |
| Volatility | High | Lower |
| Best use | Total demand | Underlying trend |
| Investment signal | Noisy | Clearer |
Where the report is used
Growth tracking
Feeds forecasts of Gross Domestic Product and business investment.
Cycle timing
Orders are often treated among Leading and Lagging Indicators.
Event trading
Big surprises can move rates and the dollar, causing Volatility.
Sector analysis
Industrial stocks react to order trends.
Advantages and disadvantages
Advantages
- Early read on factory demand.
- Official, monthly data.
- Core versions show investment trends.
- Detailed by industry.
Disadvantages
- Very volatile headline.
- Released weeks after the month.
- Heavily revised.
- No price information.
Going deeper
Read as far as you need. Each level builds on the one before it.
What 'durable' means
Beginner
Durable means storable goods with an expected life of three years or more.1
Adjusted measures
Intermediate
A core measure — orders at industries with order backlogs, minus defence, civilian aircraft and car parts — has proved a useful guide to near-term production.4
Limits of the data
Advanced
The figures are in dollars with no price adjustment, so part of a rise can simply be inflation rather than more units.2
Common mistakes
Trading the headline only
Aircraft orders can swamp the number.
Ignoring revisions
The first estimate often changes.
Treating it as real growth
Values are in dollars, not volume.
Overreading one month
Look at a three-month trend.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Tracks new factory orders for long-lasting goods.
- Durable means built to last three years or more.
- Headline swings with aircraft orders.
- Core measures show the underlying trend.
- Data come weeks after the month and are revised.
Frequently asked questions
Who publishes it?
What is 'core' durable goods?
Does it move markets?
Further learning
- Economic Indicator
How macro releases are used.
- Leading and Lagging Indicators
Where orders fit in the cycle.
- Gross Domestic Product
What orders help forecast.
- Volatility
How releases move markets.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- U.S. Bureau of Economic Analysis (BEA). Glossary: Durable goods (opens in a new tab) Checked .
- Board of Governors of the Federal Reserve System. FEDS Notes: Beyond Aggregates — Measuring Manufacturing Subsector Heterogeneity with the Business Trends and Outlook Survey (opens in a new tab) Checked .
- Federal Reserve Bank of St. Louis (FRED). Manufacturers' New Orders: Durable Goods (DGORDER) (opens in a new tab) Checked .
- Board of Governors of the Federal Reserve System. FOMC Greenbook, Part 2, October 30, 1991 (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.