In January, US durable goods orders increased by 3.1%, surpassing the expected rise of 2.0%. The previous month’s data was revised from -2.2% to -1.8%.

Orders for nondefense capital goods excluding aircraft rose by 0.8%, compared to the anticipated 0.3%. The earlier figure for these orders was revised down from 0.5% to 0.2%.

Excluding transportation, orders remained flat at 0.0%, while excluding defence, they increased by 3.5%, a revision from the earlier -2.4% which was adjusted to -1.8%.

January’s rise in durable goods orders reflects a stronger level of activity in the sector than many had expected. The revised data from December, which was adjusted upwards, changes the context slightly but does not erase the general softness seen at the end of last year. That said, fresh figures suggest a rebound, most clearly in headline orders, which advanced beyond market forecasts.

Looking deeper, demand for core capital goods—those that exclude aircraft and defence—was also more resilient than anticipated. The prior figure for this category was revised lower, but the latest numbers indicate firms continued to invest, outpacing expectations. This category is particularly useful in assessing business confidence, so an upswing at this moment hints at a more optimistic outlook from companies looking ahead.

On the other hand, not all areas reported the same momentum. Orders outside of transport came in unchanged, meaning the broader trend for manufacturing demand remains uneven. However, once defence-related goods are removed, orders expanded at a faster pace than initially thought, again reflecting an improvement rather than further weakness.

These details shift attention to what comes next. Given that business investment appears to be holding up, there is reason to consider how this might affect sentiment and positioning. Numbers from the previous month were not as weak as first published, and with January showing renewed strength, expectations may start adjusting upward. Markets could react accordingly, especially in areas sensitive to changes in industrial activity.

Data releases in the coming weeks will have to be watched closely. If further reports confirm sustained demand, adjustments may be needed in response to shifting expectations. However, if this proves to be a one-off bounce, positions based on stronger durable goods figures might need rethinking. There are also broader factors at play, with policy decisions still shaping overall conditions. The next moves will rely on whether this recovery in orders persists or if it gives way to fresh uncertainty.