Manufacturing Is Mired In Low Gear, Seeking Momentum

Investors Busniness Daily ^ | 08/03/2015 | ANDREA RIQUIER

[expat_panama]

Manufacturing growth cooled in July, an industry report showed Monday, as factories, like the broader economy, struggle to gain momentum amid an array of headwinds.

The purchasing managers' index from the Institute for Supply Management fell 0.8 point to 52.7, below economists' forecasts for a 0.2 point uptick.

The details were mixed. The new orders index rose 0.5 point to 56, suggesting more robust growth ahead. The production gauge rose to a 3-month high of 56, but the order backlog reading sank further into contraction at 42.5, its lowest since 2012. The employment measure fell 2.8 points to 52.7.

Readings over 50 signal expansion.

"The ISM index is signaling more of the same for the factory sector — continued steady growth despite challenges from soft global economic growth and a struggling domestic energy sector," wrote Richard Moody, Regions Financial chief economist, in a client note.

That's a trend many economists expect to continue. Gus Faucher, a senior economist with PNC Financial, called the July data "disappointing" and said manufacturing will continue to contribute to GDP growth only modestly.

Non-Energy Firms Look Up

Faucher thinks that while energy firms aren't out of the woods yet, the lower cost of energy should finally become a tailwind for firms outside the sector. He also expects capital spending to click on as non-energy firms face capacity constraints.

Capacity utilization, which measures slack in firms' equipment use, hasn't breached 80%, the threshold at which they are commonly expected to need to invest in equipment, since early 2008. As productivity has stayed depressed, firms haven't needed more equipment...

[central_va]

calling him a free traitor announces you anticapitalist, anti business state of being a left winger disgrace

Marx believed in Free Trade. Do you know who didn't?

Washington,Jefferson, Madison,Adams (all founders )

[central_va]

I stand with all the founding fathers who were extreme Nationalists and anti free Trade. You stand with Marx.

[central_va]

Your man is Cruz? Or do you have a favorite?

[central_va]

You should sue whoever supposedly educated you.

I was educated by the founders of this republic. The hatred free trade.

[TheCause]

Bring forth CEO Trump.

[Diana in Wisconsin]

Closing coal plants will turn that right around! *SPIT*

[bert]

all that is historical irrelevancy.

Today is not 1775. It is a very different world.

to live in the long ago past is to completely misunderstand the present.

[lurk]

Except for makers of ammo. Full speed and falling behind.

[Diana in Wisconsin]

“The days of consuming for the purpose of consuming are over.”

I agree. Big Retail around here is suffering to some extent, and there are too many EMPTY strip malls to count all over America.

I’m in Retail, but it’s a Garden Center. We’re booming with the amount of people that are fixing up their yards for better resale value (for when they lose their jobs and can no longer afford a mortgage) and/or knowing they’re going to stay put as they can’t afford to upgrade. A ‘starter’ home in our area is about $160K.

The interest in fruit trees, small fruits and vegetable gardening has grown exponentially for the past 10 years, now. People are, ‘getting it.’

I have a large circle of friends and no matter WHAT their income level, ALL of them are conserving in one way or another and stashin’ the cash (among other things) for the pending Economic Tsunami heading our way.

[riverdawg]

“Nature... has conveniently assorted our wants and our superfluities, to each other. Each nation has exactly to spare, the articles which the other wants... The governments have nothing to do, but not to hinder their merchants from making the exchange.” —Thomas Jefferson to the Count de Montmorin, 1787. ME 6:186

In this quote, Jefferson shows an understanding of the benefits of free trade and the correct government policy to encourage it.

[The Sons of Liberty]

Manufacturing Is Mired In Low Gear, Seeking Momentum

A federal dictatorial communist agenda is not an atmosphere that engenders expansion or growth.

[jpsb]

"Today is not 1775. It is a very different world."

Personally I'd rather fund government with revenue generating tariffs then a confiscatory progressive income tax. It alway amazes me when so calls conservatives rush to defend the progressive income tax and the IRS.

I'll also note that tariffs are a voluntary tax, don't want to pay the tax? Don't buy foreign stuff. Easy as pie. win win for the good old USA.

[riverdawg]

“I’ll also note that tariffs are a voluntary tax, don’t want to pay the tax? Don’t buy foreign stuff. Easy as pie. win win for the good old USA.”

This statement reveals a stunning lack of understanding of Economics 101. Most foreign-produced and domestic-produced goods are to some extent substitutable. If foreign-produced goods have a higher price tag because of tariffs, their domestic-produced substitutes will have a higher price as well. That is precisely why domestic manufacturers often lobby for tariffs on competing, imported goods.

[Toddsterpatriot]

I'll also note that tariffs are a voluntary tax, don't want to pay the tax? Don't buy foreign stuff.

Exactly! If we put a 100% tariff on foreign oil, for instance, we wouldn't have to pay if we only used US oil.

Right?

[jpsb]

It is a bad idea to put tariffs on stuff you do not have enough off or even worse don’t have any of.

[Toddsterpatriot]

So we could put a $20,000 tariff on every foreign car and not have to pay more for American built cars?

[jpsb]

Yes lets keep the IRS and the progressive income tax and not use the revenue generating method specifically called for in our old and out dated Constitution. Yeah I get it.

[Jim Noble]

Make America great again.

[Sequoyah101]

No, I don’t. I still have my iPhone 4 or whatever it is. I’ve replaced the glass and put a new battery in it and am good to go.

The problem besides obongo who has made things much worse, is one of demographics I think.

I feel like the global funk is because retirees are afraid to spend and the youngsters can’t afford to. Given the flat economy the retirees can’t afford to spend either... they are scared of living too long and running out of money.

Households are not being started, kids have tons of stuff to inherit, mountains of stuff that will never be used again are stored everywhere. Never in history have people had so much stuff that is largely still serviceable. Couple that with eco children and you get massive repurposing and much less buying.

How much stuff does a society need? I know for our part we have been reduced to buying food, clothing, fuel, cleaning supplies, a few consumables, very few durable goods and repair/ replacement parts and not much else. We just don’t need anything else.

[jpsb]

I think we should force everyone to account for every penny they make and then force them for hand over a % of it. And not a flat % either then more they make the bigger the %. That much better then putting a tariff on imports.