American Manufacturing Making A Mockery Out of Skeptics

The Business Insider ^ | 2-10-2010 | Vincent Fernando

[blam]

American Manufacturing Making A Mockery Out of Skeptics

Vincent Fernando
Feb. 10, 2010, 12:04 AM

Amongst all the European gloom, and continuing high U.S. unemployment, U.S. manufacturing is making one of the most robust come backs in the world right now.

Noah Weisberg @ Goldman: And within that global cyclical recovery, it may come as a surprise to many that the US is not obviously lagging – what Exhibit 3 shows is that the US manufacturing ISM index level is now among the highest across the world, higher than Europe, but also higher than BRICs.
In other words, at least for the time- being the US manufacturing recovery is among the paciest, and the most recent round of quarterly earnings results also seemed to support this with both domestically and globally exposed companies reporting solid results.

The U.S. ISM is shown by the thin purple line below, which has risen higher than even the BRICs (the dotted black line).

Hate to deliver good news, but last week, the U.S. ISM manufacturing index blew away expectations and generally killed it.

While high U.S. unemployment remains a pressing problem, investors need to differentiate between leading and lagging economic indicators. Yes, there are a lot of economic data sets out there with dubious predictive value, but the ISM manufacturing index is one of best regarded and most reliable leading indicators for the U.S. economy.
Employment, meanwhile, is a lagging indicator -- it improves way after everything else does. (Which is of course unfortunate for those who are unemployed, who must wait).

[snip]

[HiTech RedNeck]

Nice if true.

What kind of stuff is being cranked out here? Is half of that guns and ammo?

[Britt0n]

Ping

[Mr Ramsbotham]

Probably the result of inflationary monetary policy.

[familyop]

The Washington Post Manufactures a Fake Industrial Rebound

Alan Tonelson
Monday, January 04, 2010
United States Business & Industry Council

Can the manufacture of hype replace the manufacture of tangible goods as an engine of U.S. wealth creation? Obviously not. But the more articles we at GLOBALIZATION FOLLIES see like the Washington Post’s December 23 paean to dollar weakness as a cure-all for manufacturing’s ills, the more powerful and widespread this delusion seems.

After all, domestic manufacturing remains mired in a genuinely historic downturn. Yet what Post reporters and editors evidently consider of paramount importance is fragmentary evidence that “The weak dollar has made it easier for U.S. manufacturers of parts for appliances, automobiles and other equipment to compete globally on price and is helping them win back business lost to overseas competitors.” Even better, according to the article, “Economists say [this shift] should help the country's economic recovery.”

It’s arguably interesting, as the observed, that “U.S. exports were 12 percent higher in October than in April”– although that claim per se tells us nothing about exports of manufactures specifically. It may even be interesting that 47 percent of manufacturers in one survey reported “doing more business in the United States as a direct result of the dollar's decline....”

But a little perspective, please. Although inflation-adjusted manufacturing output is now 4.61 percent higher than in its June trough, it remains 12.85 percent lower than when the recession officially began in December, 2007. Real output in key industries like machinery, fabricated metal products, steel, construction equipment, and heating and cooling equipment stand at 15 to nearly 25-year lows, while in sectors like ball bearings, machine tools, and engines and turbines production stands at all-time record lows. And manufacturing capacity is actually shrinking for only the second time in modern American history.

And although manufacturing exports are indeed up this year, manufacturing imports have increased even more. Thus the manufacturing trade deficit is rising once again (by more than 30 percent since the April trough stressed by the Post), and consequently is slowing growth overall and sinking the whole economy further into debt.

There’s nothing wrong with, as that classic song says, “accentuating the positive.” But when it comes to domestic manufacturing, this article reveals the Post to be whistling in the dark.

Sources: “Dollar’s decline a boon for U.S. manufacturers,” by Dana Hedgpeth, The Washington Post, December 23, 2009; calculated from “Federal Reserve Statistical Release: Industrial Production and Capacity Utilization, Tables 1 and 2, 1A, 1B, 1C, 1D, and 1E of the G.17 Supplement; and Table 10: Industrial Production: Market, Industry Groups, and Individual Series, Data from January 1986 to present, and Data through 1985, Seasonally Adjusted,” http://www.federalreserve.gov/releases/g17/table1_2.htm; and calculated from Trade Dataweb, U.S. International Trade Commission, dataweb@usitc.gov

Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).

[familyop]

It’s the Trade Deficit, Stupid!

Wednesday, February 03, 2010
by Peter Morici, Ph.D.
http://americaneconomicalert.org/view_art.asp?Prod_ID=3401

[familyop]

"Is half of that guns and ammo?"

Don't forget the fast food pressing/forming machines, serving government employees and government contractors on the go! ;-)

[lewislynn]

Nameless manufacturing plants are churning out the products?

Someone name 5 American manufacturers from this study and the "american" cities where their "manufacturing" plants are located.

[dennisw]

We have a huge trade deficit so we must not be manufacturing the right items. A lot of our so called manufacturing is making Twinkies, Cocoa Puffs, TV dinners and other processed foods. This stuff is almost non existent in China.....What China makes is a truer mix of what we traditionally think of as manufacturing

Germany and Japan are manufacturing super powers yet don’t run trade deficits. They manufacture more high end items and export them

[familyop]

BTW, rich free traitors are keeping the firearms and ammo industry going for sure. ;-) Apparently, we technical "Neanderthals" are scary to them.

Arming Goldman With Pistols Against Public: Alice Schroeder
http://www.bloomberg.com/apps/news?pid=20601110&sid=ahD2WoDAL9h0
[Title and link only, as no content from Bloomberg is allowed to be posted at FR.]

Intelligent Investing Panel
Going Great Guns
Forbes
David Serchuk, 04.23.09
"Thomas:...But, you know, you could always find another job that would pay all right, and pay slightly above minimum wage, could allow you to at least live and have a home in most communities. And I think that's slowly changed."
[...]
"Forbes: I was in Colorado, and I knew people who had 200, 300 guns. And they'd stash them in various hidden places around their compound. This wasn't all that uncommon out west."
[...]
"Sonders:...we have gone from a couple decades ago being a manufacturing economy to more of a service-oriented, information economy. That has just displaced permanently a lot of workers,..."

[death2tyrants]

recent round of quarterly earnings

To Obama, increased earnings should equal increased taxes.

[dragnet2]

Nameless manufacturing plants are churning out the products? Someone name 5 American manufacturers from this study and the "american" cities where their "manufacturing" plants are located.

They're Kool Aid making machines, producing Kool Aid for all the applicants looking for jobs.

[dila813]

Raw Materials Pegged to Dollars and Products Sold in Dollars.

As long as the Dollar stays low and the dollar is stable, it will be a building boom in Mfg.

The concern here is on spending and a collapse of the Dollar and Raw Materials (China) removing their peg.

[bigbob]

How then do you explain the ISM index?

The 13 manufacturing industries reporting growth in January — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; and Plastics & Rubber Products. Furniture & Related Products is the only industry reporting contraction in January.

NOT Twinkies.

The point of this posting was to provide factual data, not conjecture about processed foods.

[lewislynn]

The point of this posting was to provide factual data, not conjecture about processed foods.

Doesn't matter what you pretend the point is, processed food and processing food falls under the manufacturing category.

[iopscusa]

Maybe US Mfg is rebounding, no thanks to the FedGov. BTW, I find BI to be full of crap on most things, just like the rest of the crap that spews out of NY centered economic news...the commentary on BI is chock full of creepy Kos types that know nothing! They are the People Mag of Business newz!

[Flavius]

Well I’m gearing to do some good old US manufacturing.
So, if anyone could back my 1M bank loan it would be appreciated.

[DH]

Ok, I give up. Who is buying all of this stuff being manufactured here in the U.S.? It sure the hell isn’t Americans.

[Cringing Negativism Network]

http://www.ft.com/cms/s/0/35de8406-155c-11df-8f05-00144feab49a.html

“China confirmed as world’s top exporter”

How’s that “free trade” thing working out?

[dennisw]

Trade deficit numbers just came out minutes ago....They are larger than expected

If we manufacture so much that we are number one this trade deficit number sure has me mystified. Maybe you can explain it to me

You named our manufacturing sectors
I would love to see how much each sector contributes to our total manufacturing. Processed foods is a huge sector and has replaced our steel sector in numbers for sure

In Bethlehem Pennsylvania where Bethlehem Steel cranked out steel to construct buildings and battleships. That mill is now a gambling casino operated by the Sands of Las Vegas. We replaced a sober producer economy with a casino style consumer economy exemplified by the house flipping mania that went bust