Financial coverage applauded the 3.1% m\/m rise in computer & electronic products orders, supposedly reflective of AI- and AI-adjacent spending.[iii]<\/a> To many onlookers, this seemingly supports the notion AI is driving all business spending, which could be problematic if demand dries up.<\/p>\n But while AI is no doubt important, US growth isn\u2019t just an AI-spending story\u2014and it never has been. Yes, orders for computer & electronic products rose last month. But so did orders for primary metals and electrical equipment, appliances & components.[iv]<\/a> Machinery orders did dip (-0.1% m\/m) last month\u2014its first monthly contraction in 16 months\u2014which illustrates a broader point: Demand for durable goods has steadily grown for a while now.[v]<\/a> (Exhibit 1)<\/p>\n Exhibit 1: Durable Goods Industries New Orders Since July 2025<\/p>\n Source: FactSet, as of 7\/28\/2026. New orders for major durable goods industries in billions of US dollars, July 2025 \u2013 June 2026. Indexed to 100 on July 2025.<\/p>\n Transportation orders are an outlier because of their aforementioned volatility, as the airline industry tends to make orders for hugely expensive expenditures in clumps, with air shows a big factor. There is also a caveat, of course: These data aren\u2019t inflation-adjusted, so the values may reflect higher prices to a degree. Yet overall, orders across all major industries have expanded over the past 12 months. Some of that growth reflects the AI buildout, but it also speaks to demand for day-to-day items, from air conditioners and microwaves to auto parts and toaster ovens. This isn\u2019t a case of just one category carrying growth while everything else sags.<\/p>\n While durable goods orders are forward-looking, they capture a limited segment of US output\u2014namely, the equipment segment of nonresidential investment (i.e., business investment). Based on 2025 nominal GDP, equipment spending comprised around 39% of business spending, well ahead of structures (21%) and a tad behind intellectual property products\u2019 (which includes software and research & development) 40%.[vi]<\/a> Taking a step back, equipment investment was just 5.3% of 2025 US GDP\u2014paling in comparison to consumer spending\u2019s 70%.[vii]<\/a><\/p>\n Yet consumer spending<\/a> is rarely the economic swing factor defining cyclical shifts\u2014business investment is. An extended stretch of falling capital goods orders may signal businesses are tightening their belts after overextending themselves, taking less risk and funneling less new capital into the economy. This is often consistent with the onset of recession. That isn\u2019t the case today. Capital is still flowing via lending and corporate bond markets, and businesses are merrily deploying it.<\/p>\n Tech and tech-adjacent spending garners the most attention, overshadowing other expanding segments of the US economy. That underappreciated, broad-based growth suggests the US economy remains on firm footing\u2014a reason we remain bullish today.<\/p>\n \u00a0<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/07292026-commentary-exhibit-1.ashx.png\")
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