Wampum

The lightbulb turns on for Reuters...

AP still fumbling in the dark.

Last night, just before turning in, I recalled the Durable Goods report had been released earlier in the day, with disappointing numbers. I've been following the report for the past few months, as an interesting trend had developed regarding defense vs. non-defense orders. Opening the report, I was not surprised the trend continued, although I was shocked at the growing disparity.

But back to Reuters. Apparently, they finally picked on the real news in the reporty as well:

Durable Goods Orders Slip Unexpectedly Wed Nov 24, 2004 08:32 AM ET

WASHINGTON (Reuters) - Orders for long-lasting U.S.-made goods unexpectedly slipped 0.4 percent last month as demand for computers, cars and civilian aircraft slumped, a government report showed on Wednesday.
The Commerce Department said orders for durable goods -- big-ticket items like cars and refrigerators meant to last at least three years -- would have been much weaker in October were it not for strong military demand.

Non-defense durable goods orders dropped 1.5 percent, the sixth decline in the last seven months, and orders excluding transportation fell 0.7 percent, the department said.

...

Strong demand for military aircraft gave the October figures a stronger appearance then they would have had otherwise.

Orders for military aircraft soared 35.2 percent last month, but civilian aircraft orders slid 0.4 percent. Motor vehicle demand fell a sharp 2.8 percent and orders for computers and related products dropped 10.3 percent.

AP, on the otherhand, completely missed the boat in their analysis, which failed to make any mention of the import of defense orders on October's bleak, but could be much bleaker numbers.

Reuter's, however, has not completely redeemed itself; they swallowed the Commerce Department's message that last month's revision from 0.2% to 0.9% indicates things really aren't so bad. But even a quick glance at the report reveals that, once again, excluding defense orders, which saw a whopping 26.7% increase in capital goods orders, fell by 0.2%. July's report as well shows that defense orders mitigated the impact of plummeting private sector spending.

Posted by MB Williams at November 25, 2004 07:17 AM | TrackBack