Manufacturing activity shrinks in June, ISM says

wall street journal ^ | 7/3/2012 | Steve Goldstein

[tobyhill]

Manufacturing activity shrunk in June for the first time in three years as new orders dried up, according to a key report released Monday that points to a deteriorating U.S. economy.

The Institute for Supply Management’s manufacturing index fell to 49.7% from 53.5% in May, in the first reading below the 50% line indicating expansion or contraction since July 2009. Read “Recession now much more likely.”

The report was worse than the MarketWatch-compiled forecast of 52.3%.

After the release of the ISM data, the yield on the 10-year Treasury note (US:10_YEAR) dropped sharply, indicating traders rushing for perceived safe investments like government bonds. Read more in Market Snapshot.

Of the 18 manufacturing industries, nine reported contraction and seven reported growth.

The 12.3 point drop in the new-orders index was the largest since the 12.4 point drop in October 2001 — just a month after the terrorist attacks on the World Trade Center.

The production index dropped sharply by 4.6 points to 51.0%, while the employment index edged back modestly to 56.6% from 56.9%.

[ClearCase_guy]

The report was worse than the MarketWatch-compiled forecast of 52.3%.

In other words: Unexpected.

[AlexW]

Everything in the USSA today is reported as “unexpected”.

[Dallas59]

Don’t worry...Health Care will save us!

[servantboy777]

Here's and idea. If the feds are thinking of pumping the markets with hundreds of billions in liquidity during a new QE3 monetary program.

How’z bout rebating back to the American tax payer the trillions stolen and given to the bankers, financiers, foreign interest, lobbyist over the last few years during Bush's original 800 billion bailout to Obozo’s trillions.

Put the money into the economy. Folks would begin to pay down debt, purchase durables, increase investment, fix that broken whatever or buy that new lawn mower. All of which would stimulate the economy.

If consumption truly is over 60% of the economy....well?

[BluH2o]

But just last evening on ABC News we were told that gas prices are down for the 4th of July and this saving is going to translate into additional spending in back to school sales. This additional spending will turn retail sales around ... which is good news for Obama on two fronts.

Wow ... I'm impressed!

[Carbonsteel]

Gas prices are still well over $3.00 a gallon.

So that’s like bragging about how your 4 pound tumor is now a 3 1/4 pound tumor.

Gas prices shouldn’t be over two bucks a gallon and if it wasn’t for this administrations insane energy and monetary policies that’s exactly where they would be.

[PogySailor]

Who needs an economy? We’ve got ObamaCare!