Each monthly report of durable goods orders can cause brief market elation or panic due to how volatile the numbers are. The U.S. Department of Commerce has reported that durable goods were down by 3.4% in the month of December. Dow Jones had its consensus estimate at a gain 0.3%, and Bloomberg’s consensus estimate called for a gain of 0.7%. As a reminder, the headline durable goods report is one of the most volatile economic reports from all government economic releases.

December’s durable goods figure on an ex-transportation basis was -0.8%. Bloomberg had its consensus estimate at a gain of 0.8% for the month.

There is a core reading for durable goods, and investors should consider this to be the most important raw component of what is happening each month. This is the orders for nondefense capital goods, excluding aircraft, and that reading was down at -0.6%.

As far as the total figures, this is a drop of $8.1 billion to $230.5 billion in December’s total durable goods orders. The Commerce Department, via the Census Bureau, indicated that this decrease put the durable goods readings as negative in four of the past five months — and it followed a 2.1% decrease in the month of November.

One thing to consider is that the report is weak enough that it almost certainly will force economists to ratchet down their fourth-quarter gross domestic product estimates. That report is due on Friday morning, and the Bloomberg consensus was last seen at 3.2%.

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