US Core Capital Goods Orders and Shipments Rise in February

Increase suggests business spending on equipment was on firmer footing before the US-Israel war with Iran

Apr. 7, 2026 at 4:45pm

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A vibrant abstract illustration composed of overlapping triangles and circles in shades of blue, red, and yellow, conveying a sense of economic growth and activity without any literal financial symbols or text.Amid global uncertainty, the U.S. manufacturing sector showed signs of resilience in February before the outbreak of war.Washington Today

New orders for key U.S.-manufactured capital goods increased more than expected in February, while shipments of those products rose solidly, suggesting business spending on equipment was on firmer footing before the war with Iran. The strength reported by the Commerce Department followed weakness in January, which some economists had blamed on harsh weather. However, the U.S.-Israel war with Iran, now in its second month, has boosted oil prices and snarled supply chains, which may have caused firms to turn cautious again in March and April.

Why it matters

The data on core capital goods orders and shipments is a closely watched proxy for business spending on equipment, which is a key component of economic growth. The increase in February suggests the broader economy was on firmer footing before the outbreak of the U.S.-Israel war, but the conflict has created new uncertainties that could dampen business investment going forward.

The details

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 0.6% in February after a downwardly revised 0.4% drop in January. Economists had forecast a 0.4% increase. There were increases in orders for primary metals, fabricated metal products, and machinery. Core capital goods shipments increased 0.9% in February after being unchanged in January. However, some economists are worried the Middle East conflict could hamper shipments, as supplier delivery times increased to a four-year high in March.

  • In February, new orders for key U.S.-manufactured capital goods increased more than expected.
  • In January, new orders for these capital goods had declined.
  • The U.S.-Israel war with Iran began in March and is now in its second month.

The players

Commerce Department

The U.S. government agency that reported the data on new orders and shipments of key capital goods.

Stephen Stanley

Chief U.S. economist at Santander U.S. Capital Markets, who commented on the potential impact of the war with Iran on business investment.

Bradley Saunders

North America economist at Capital Economics, who noted modest downside risks to the forecast for business equipment investment growth.

Oren Klachkin

Financial market economist at Nationwide, who commented on the factors that could dampen durable goods spending.

Boeing

The aircraft manufacturer that reported a sharp decline in civilian aircraft orders in February.

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What they’re saying

“I suspect that firms turned cautious again in March, and likely April, waiting to see how high energy prices would move and for how long.”

— Stephen Stanley, Chief U.S. economist

“With non-defense aircraft and parts shipments dropping 5.7% in February, there are modest downside risks to our forecast for business equipment investment growth to have accelerated to 7.5% annualized last quarter.”

— Bradley Saunders, North America economist

“Durable goods spending does not like elevated uncertainty, less accommodative financial conditions, weaker sentiment, cost pressures, and supply chain problems – all of which are evident since the start of the conflict.”

— Oren Klachkin, Financial market economist

What’s next

Economists will continue to monitor the impact of the U.S.-Israel war with Iran on business investment and the broader economy in the coming months, as the conflict has created new uncertainties around energy prices and supply chain disruptions.

The takeaway

The increase in core capital goods orders and shipments in February suggests the U.S. economy was on firmer footing before the outbreak of the war with Iran, but the conflict has introduced new headwinds that could dampen business investment going forward, underscoring the fragility of the economic recovery.