U.S. manufacturing may be in trouble. Nearly all key indicators measuring the health of manufacturers in the world’s largest economy have disappointed over the past year.
Depending on which report you read from the same source, the U.S. economy is doing extremely well and also in danger of slowing sharply.
“Nothing to see here, folks” was the reaction most analysts had to a completely shocking report earlier this week that showed manufacturing business conditions in New York State deteriorated at their fastest pace since the start of the financial crisis.
The two forecasting teams that came closest to predicting the U.S. economy would nearly stall in the first quarter expect other key economic data due this week to be strong.
U.S. manufacturing activity shrank for a second straight month in July as recent economic weakness spilled into the third quarter, according to the Institute for Supply Management’s closely watched index. But that wasn’t the worst of it: new orders, a gauge of future business activity, also shrank for a second month, albeit at a slightly slower pace.
The closely watched Institute of Supply Management’s nationwide manufacturing index showed contraction in manufacturing for the second month in a row in July and Bradley Holcomb, chairman of the ISM’s business survey committee, sounded equally subdued in a morning teleconference.
Ellen Freilich contributed to this post
The Fed did the twist. Will it shout as well? There has been some debate among economists about whether the U.S. central bank might launch a third round of outright bond buys or QE3 given that it just prolonged Operation Twist.
Manufacturing activity picked up in January, an encouraging sign for U.S. growth prospects. Right? Perhaps not as much as it used to be. The shrinking role of factory production in the U.S. economy – now just over a tenth of the nation’s output – means the Institute for Supply Management’s closely watched survey is a less sturdy predictor of broader trends.