Friday, July 31, 2009

Defense Spending?!

As in prior quarters, net exports have been helping hold up GDP (it is the expenditure category that increased the most in real terms 2009 Q1-Q2). More surprising to me is that defense spending is the second largest increase ... my spending-based forecasting method would not have picked that up.

NOTE: Nondefense spending was hardly changed Q1-Q2. I assume that the "stimulus package" did not have a big dose of defense spending, but rather was essentially all nondefense spending.