A few days ago the Commerce department
released this happy report - which shows manufactured goods orders down, unfilled orders down - this in the middle of a supposed recovery?
What's clear is that the huge lump of federal spending is not producing follow on demand, instead it is boiling away keeping a few companies in business that happen to be on the federal gravy train.
For the rest of us, borrow against your home equity (See Scheme, Ponzi).
But wait, there is more good news!
The top gaining catagorey? Defense communications, up voer 50% versus this time last year, versus only 17% for non defense. The story is the same in aircraft - none defense, up 10% - defense up 18%.
The other big gainers - computers continue to be strong, as they have for years - but if one takes all computer catagories together - storage and peripherals along with CPUs - then petroleum products are out pacing them. As is refining of petroleum, as is petroluem mining equipment. Gas, has been good to be in this last year.
Another great catagorey has been housing construction and construction equipment - fueled by a housing boom that is dying.
It isn't all bleak - photographic equipment and medical imaging are both doing extremely well - combined this sector grew at nearly 20%. However, size matters - transportation equipment, which accounts for nearly 1/3 of durable goods - down by 2 percent, and the two consumer sectors - light trucks and autos - are off by a combined 5.5%
But where it gets ugly is in non-durable manufacturing: ex-oil, it is up only 1.9% against this point last year.
What's the story?
The story is that this recovery isn't really - that for the vast majority of manufacturing sectors, business is growing incrementally, but not robustly - and that much of the growth is directly attributable to low interest rates and defense spending.
Which means when they stop, so does the "recovery".