US Durable Goods Orders Preview – 25/9/25

On Thursday, 25 September 2025 at 13:30 UK time, the U.S. Census Bureau will release August Durable Goods Orders, a timely read on manufacturing momentum and private-sector capex (capital expenditure) that feeds directly into Q3 GDP tracking.

Given July’s headline slide (-2.8% m/m) driven largely by transportation volatility, this print matters for two reasons:

• 1 – whether transportation, especially non-defense aircraft, reverses enough to lift the headline.
• 2 – whether the underlying trend in core orders (non-defense ex-aircraft) continues to grind higher after July’s encouraging gains. With consensus looking for a modest decline (-0.5% / -0.7%), our assessment weighs aircraft mix, the auto impulse, and survey/production signals to judge the odds of an upside surprise and the implications for USD rates and FX.

Bottom Line – Our Call

• Headline Durables MoM (Aug): +1.2% m/m (range +0.5% to +2.0%), above consensus -0.5%/-0.7%.
• Ex-Transportation: +0.2% m/m (flat to +0.5%).
• Core capex (non-defense ex-aircraft) orders: +0.3% m/m; shipments (GDP proxy): +0.4% m/m.

We think the street is underweighting a big-dollar rebound in non-defense aircraft and a solid autos print, while core still grinds modestly higher.

Why expect a beat:

1) Aircraft orders should swing the headline positive.
Boeing booked 26 gross orders in August, including 14 x 777X (very high-ticket), 7 x 787, and 5 x 737 MAX. July had 31 gross orders, but they were overwhelmingly 737s (lower value). August’s mix is far richer in dollar terms, which is what Census counts. That should lift non-defense aircraft & parts and the overall transportation bucket. (This is the same bucket that drove July’s -2.8% headline drop.).

2) Autos are a tailwind.

• Industrial Production (Aug): motor vehicles & parts +2.6% m/m. That aligns with strong dealer throughput and should support both shipments and orders for autos/parts inside transportation.
• Auto sales pace stayed firm around 16.0 – 16.1m SAAR in August, only a touch below July’s 16.4m, supportive for near-term orders.

3) Core manufacturing demand improved in surveys.

• ISM Manufacturing New Orders moved back into expansion at 51.4 in August (after 6 months sub-50), a decent sign for ex-transportation orders.
• S&P Global US Manufacturing PMI also reported solid growth in new orders in August.

4) July context helps the optics.
July headline was -2.8% m/m, but ex-transportation was +1.1% and core capex orders +1.1%; the weakness was almost entirely aircraft driven. That sets up an easy aircraft-led rebound print in August if Boeing’s big ticket orders were booked in time.

What to watch in the release

• Transportation (non-defense aircraft, autos): Expect a strong positive contribution from aircraft plus a modest lift from autos. If aircraft are recognized as firm August orders (Boeing shows they were), headline should print positive. If not, risk skews lower.
• Core capex orders (non-defense ex-aircraft): After +1.1% m/m in July, look for +0.1–0.5%. IP showed softness in machinery/fab metals in August even as autos rebounded, so I’m not chasing a big number here. Reuters+1
• Core capex shipments: GDP-relevant; We’re at +0.3–0.5% after +0.7% in July.

Why consensus might be too low

• Many models key off Boeing order counts; August’s 26 vs July’s 31 looks softer at first glance, but August’s mix (14 x 777X + 7 x 787) implies much larger dollar value than July’s mostly-737 ledger, precisely what matters for Census new orders.
• Autos data into late August were healthy, and IP confirms +2.6% for motor vehicles & parts.
• Survey breadth improved in August (ISM new orders >50), supporting a small positive in ex-transportation.

Risks to the call

• Timing/recognition risk: If the Cathay 777X order or other big August deals are recognized in Boeing’s stats but not in Census August (e.g., LOIs firmed in September), the aircraft pop may slip to next month. That’s the main downside risk.
• Defense volatility: July saw a drop in defense capital goods orders; another wobble could trim headline, though the big swing factor is still non-defense aircraft.
• Mixed regional surveys into September (NY Fed slumped, Philly Fed surged) underscore choppy momentum—but that’s more about September than this August print.

Market Take (FX lens)

• Beat on headline (+1% or better) with core ≥ +0.3%: knee-jerk USD bid, UST 2s/5s up a few bps; risk-on equities probably take it in stride given the Fed’s recent cut, but USD strength likely shows up vs JPY and CHF first.
• Headline >0 but ex-transport flat/negative: reaction fades—market will chalk it up to aircraft noise.
• Miss (<-0.5%) and soft core: supports the “growth wobble” narrative post-Fed; USD soggy, front-end yields lower.

Conclusion

We expect a headline beat in August Durable Goods, +1.2% m/m on a rebound in high-value aircraft bookings and a helpful autos tailwind, while ex-transportation should be slightly positive (+0.2%) and core capex orders +0.3% with shipments +0.4%. The principal downside risk is timing/recognition of large aircraft deals; a softer defense print would be secondary.

Into the release, the balance of evidence argues the street is leaning too low on the headline. A positive headline alongside steady core should elicit a knee-jerk USD bid and a modest front-end yield pop; if strength is narrowly aircraft-led with flat core, market reaction should fade.

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