October 24, 2019
The Commerce Department reported that orders for non-defense capital goods fell 2.8 percent in September after dropping 3.1 percent in August. The September figure is more than 10 percent below the September 2018 level. If we pull out aircrafts, which are highly volatile and being pushed down by Boeing’s 737-Max problems, orders were still down by 0.5 percent. Orders for the month are up just 0.2 percent from the year-ago level.
This would have been worth some attention (both the NYT and WaPo ran wire service stories), since the rationale for the corporate tax cut pushed through by the Republicans in 2017 was supposed to be that it would lead to an investment boom. While there was a modest rise in investment in the first half of 2018 (but certainly not a boom), investment has been extraordinarily weak for the last year. Clearly, the tax cut has not produced the projected benefits.
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