Thursday, February 05, 2009

Never Mind the Homeless!! Keep Those Weapons Coming!

Three guesses who is getting many of them.

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The durable goods orders for December, released today, provide more evidence that the economy fell off sharply late last year. There is a little bit of evidence that things stabilized a bit in January, but it is too early to say.

As it is, using a three-month moving average to smooth out somewhat volatile numbers, durable goods orders from October to December were down 16.8 percent compared with the same period of 2007. That is the sharpest year-over-year fall since they started collecting data in 1958.

But the real news is in the breakdown. Durable goods orders other than the military were down 18.6 percent, also a record. Within that group, car industry orders were off 25.9 percent, and nonmilitary aircraft and parts orders — hello, Boeing — were down 66.9 percent.

But military orders were up 18.4 percent.

Pentagon orders are notoriously volatile, so that might be a fluke if it was not continuing a trend. For the whole year, such orders were up 26.8 percent, while orders for nonmilitary goods were down 7.3 percent.

Perhaps that was economic stimulus. Perhaps it was an effort to spend the money before the Democrats took over. In either case, the Pentagon seems to be one of the few willing buyers these days.

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