Tax Cuts

[Rocky Mountain Shock]

I don't have an account to the WSJ, so I can't read the full text of each article, but from what I can read these articles included in the last two posts are fascinating.

'79's post was a Huffington Post article based on a WSJ article from May 27th that basically says orders for equipment and machinery is declining.

Wufan's article is from the same WSJ exactly 12 days earlier, that says orders for the exact same equipment is way up.

So WTF? Maybe someone who can access both articles can post a summary of each?

[jdshock]

I don't have an account to the WSJ, so I can't read the full text of each article, but from what I can read these articles included in the last two posts are fascinating.

'79's post was a Huffington Post article based on a WSJ article from May 27th that basically says orders for equipment and machinery is declining.

Wufan's article is from the same WSJ exactly 12 days earlier, that says orders for the exact same equipment is way up.

So WTF? Maybe someone who can access both articles can post a summary of each?

I think it's really a combination of a few things. First, the data looked worse 12 days later. Second, some of the data included aircraft orders and some did not. For example, in the first WSJ article, the first article they cite to champion the idea that capital expenditures are increasing is "Boeing Boosts Capital Spending Plans in Wake of Tax Changes." In the second WSJ article, they cite an article about the most recent numbers (https://www.wsj.com/articles/u-s-dur...article_inline) which actually suggests a drop in capital expenditures. In that article, they say the decline in capital expenditures "was led by a 29% decrease in the volatile civilian-aircraft segment." Lastly, they might be looking at slightly different numbers. The first article refers broadly to capital expenditures as "spending on factories, equipment and other capital goods by companies in the S&P 500." The second is looking specifically at orders for durable goods. While these are probably similar, there is probably some difference between the two.

[wufan]

I think it's really a combination of a few things. First, the data looked worse 12 days later. Second, some of the data included aircraft orders and some did not. For example, in the first WSJ article, the first article they cite to champion the idea that capital expenditures are increasing is "Boeing Boosts Capital Spending Plans in Wake of Tax Changes." In the second WSJ article, they cite an article about the most recent numbers (https://www.wsj.com/articles/u-s-dur...article_inline) which actually suggests a drop in capital expenditures. In that article, they say the decline in capital expenditures "was led by a 29% decrease in the volatile civilian-aircraft segment." Lastly, they might be looking at slightly different numbers. The first article refers broadly to capital expenditures as "spending on factories, equipment and other capital goods by companies in the S&P 500." The second is looking specifically at orders for durable goods. While these are probably similar, there is probably some difference between the two.

I’m not an economist, but this is a reasonable take as best I can tell. They are parsing the data in a slightly different way to tell different stories. I imagine both are 100% accurate, and it’s an important lesson to all to watch out for biases when searching out information.