US Factory Orders Decline in December

Drop driven by sharp drop in commercial aircraft bookings, but demand elsewhere remains strong

Published on Feb. 23, 2026

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New orders for U.S. factory goods fell 0.7% in December, largely due to a 24.8% decline in commercial aircraft orders. However, orders for other products like computers, electronics, and machinery saw gains, partly driven by robust investment in artificial intelligence.

Why it matters

Manufacturing accounts for 10.1% of the U.S. economy, and the sector has faced headwinds from President Trump's tariffs, which have raised costs for factories and consumers. The Supreme Court recently struck down those tariffs, but the President has quickly imposed new ones, signaling an ongoing trade policy uncertainty.

The details

The 0.7% drop in factory orders came after an unrevised 2.7% increase in November. Economists had forecast a 0.6% decline. While commercial aircraft orders fell sharply, orders for computers, electronics, electrical equipment, machinery, fabricated metals, and motor vehicle parts all saw gains. Business investment slowed in Q4 but is expected to accelerate in 2023 due to tax cuts.

  • Factory orders fell 0.7% in December 2026.
  • In November 2026, factory orders increased 2.7%.

The players

U.S. Commerce Department's Census Bureau

The government agency that reported the factory orders data.

President Donald Trump

The U.S. President who pursued sweeping tariffs that have impacted the manufacturing sector.

U.S. Supreme Court

The court that struck down President Trump's tariffs, though the President quickly imposed new ones.

Shannon Grein

An economist at Wells Fargo who commented on the trade policy implications.

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What they’re saying

“The Supreme Court ruling doesn't reset trade policy, and President Trump's swift actions signal tariffs are here to stay even if they are adjusted in coming months.”

— Shannon Grein, Economist, Wells Fargo (ksgf.com)

The takeaway

The manufacturing sector continues to face uncertainty around trade policy, with the Supreme Court striking down President Trump's tariffs only for the President to quickly impose new ones. However, some areas of manufacturing like AI-driven industries remain strong, suggesting the sector's outlook is mixed.