Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Daily Digit: Defense spending up 13%

Friday, October 26, 2012 - 01:27

Oct. 26 - The U.S. government's 13 percent military shopping spree adds to a spike in quarterly GDP. Conway G. Gittens reports.

▲ Hide Transcript

View Transcript

Our daily digit is lucky 13, 13 percent to be exact; a number that shows a big jump in U.S. government spending on defense in third quarter compared to a year ago. To give it a little perspective, in the second quarter, federal spending on defense dropped 0.2 percent. And we call it lucky 13 because it uplifted the overall GDP reading for the July to September period. But William Schomberg, Reuters Economics and Markets Editor for the Americas, says the government's shopping spree on aircrafts, ships and weapons doesn't help the economy all that much. SOUNDBITE: (ENGLISH) WILLIAM SCHOMBERG, REUTERS ECONOMICS AND MARKETS EDITOR FOR THE AMERICAS, SAYING: "The big picture remains that the U.S. economy is still pretty lackluster. Consumers are more confident than companies. Consumer spending rose. Companies look very cautious about the fiscal cliff and are not investing a lot going into that uncertainty in Washington." And there's some thought -that uncertainty may have something to do with the big jump in spending....maybe forcing the government to dig deep before possible spending cuts are forced if Congress doesn't reach a budget deal. Not so - says one analyst who pins some of the jump on an extra pay cycle. Nevertheless, there is another reason to say the lucky 13 again. It is lucky, at least for companies that work with the Pentagon, like Lockheed Martin, Boeing and Northrop Grumman - all raised their guidance for this year, but there's a question mark for next year when defense budgets are expected to come under fire.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Daily Digit: Defense spending up 13%

Friday, October 26, 2012 - 01:27