Weekly Economic Update 05-08-26: Factory Orders; New Home Sales; ISM Services; Productivity; Consumer Credit; and April Employment

The price of new homes plunged in March.

The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the views of the Georgia Institute of Technology or the Georgia Board of Regents.

Last week, I was in Savannah, GA, and this week saw me in Washington D.C., speaking at Innovate 2026. I hope everyone there enjoyed my talk and were able to take something away that will help them and their business going forward. And let me officially welcome the many conference attendees who subscribed to the blog!

Unfortunately, the new subscribers won’t get a feel for how the blog normally flows. Given my hectic travel schedule, I haven’t had time to put together my usual opening commentary on some recent happenings in the economic sphere. Any free time I have had recently has gone to developing a new resource that my paid subscribers will learn about at the bottom of this post.

So, without further ado…on to the data…

Factory Orders

New orders for manufactured goods were up 1.5% in March to $630.4 billion, more than double the 0.6% gain that was expected (full release here). February was +0.3% and January was essentially flat at +0.03%, so the headline has now climbed for three straight months — and the March gain is the largest single-month move outside of the tariff-frontloading spike back in May 2025.

Nondurable goods orders were up 2.1%, the fourth consecutive monthly gain and the largest since August 2023. Durable goods orders, after three straight monthly declines (December through February), rebounded by 0.8% — slightly better than the 0.5% that was expected. Computers and electronic products led the durables side, up 3.7% to $29.6 billion (up eleven of the last twelve months). Simply put, the manufacturing sector finally has some momentum.

But here is the part worth focusing on: core capital goods orders — nondefense capital goods excluding aircraft, which is the cleanest single read we have on business investment intent — were up 3.4% in March to $83.0 billion. That is an all-time high for the series. To put that monthly gain in context, the next-largest m/m gain in the past three years was +1.9% back in May 2025. Companies don’t write big checks for new equipment unless they think they’re going to need it. The question is, how much of this is AI/data center related?

Finally, this release also tells us something about tariffs. The narrative has been that tariff uncertainty was freezing capex decisions. With SCOTUS clearing up that question, the core capex print suggests companies have put tariffs behind them.