Posted on 08/22/2019 7:50:04 AM PDT by SeekAndFind
U.S. manufacturer growth slowed to the lowest in almost 10 years in August, the latest sign that the trade war may be exacerbating the economic slowdown.
The U.S. manufacturing PMI (purchasing managers index) was 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit.
Any reading below 50 signals a contraction.
“Manufacturing companies continued to feel the impact of slowing global economic conditions,” Tim Moore, economics associate director at Markit, said in a statement on Thursday. “August’s survey data provides a clear signal that economic growth has continued to soften in the third quarter.”
Manufacturing had been one of the big winners during the Trump administration, but the tit-for-tat tariffs in the U.S.-China trade war have taken a big bite from the sector. U.S. manufacturing activity slowed to a nearly three-year low in July, based on data from the Institute for Supply Management.
But this new survey showed new orders received by manufacturers dropped the most in 10 years, while the data also showed export sales tanked to the lowest level since August 2009.
“The most concerning aspect of the latest data is a slowdown in new business growth to its weakest in a decade, driven by a sharp loss of momentum across the service sector,” Moore said. “Survey respondents commented on a headwind from subdued corporate spending as softer growth expectations at home and internationally encouraged tighter budget setting.”
Manufacturers continued to reduce their inventories this month, which was mainly contributed to the concerns about the demand outlook, according to Markit.
(Excerpt) Read more at cnbc.com ...
That’s dumb and very ignorant if economics and Trump’s plan.
If you think the BLS is not liberal then you must be one too. Under Obama the BLS lied to support him and under Trump they lie to hurt him.
What facts. Alberta’s child had stated no facts and neither have you. Typical liberals.
I was on the road the last few days.
I saw cars and trucks from 25 states + Ontario.
AND, I saw a WHOLE LOT of new equipment and trucks and pipe and machinery. As in...more than I have seen in years.
Grade “A” BS
I’m on the big road a fair amount, and I notice lottsa new semi-trucks on the road. All brands, especially the New styled Freightliners, Macks and Volvos. The freight lines can suddenly afford new equipment.
Call me crazy, but how do tariffs, which are designed to PROTECT American manufacturing jobs, cause a slow-down in manufacturing? Huh? Sure, tariffs will likely lead to some price increases, but I don’t logically see how putting a fax on FOREIGN manufactured goods is going to lead to AMERICAN factories laying people off.
Let's see who's a liberal and who isn't: I was complaining about budget deficits while Obama was president...and I AM COMPLAINING ABOUT THEM NOW - because I am a fiscal CONSERVATIVE TOO (not just a social conservative). Now - the GOP congress and Trump are going to (more than likely) sign the LARGEST budget deficit in HISTORY. When Obama was president - EVERYONE on this forum came UNGLUED. Now - meah-
Where is YOUR outrage? And you have the NERVE to call ME a liberal? Are YOU conservative enough to be OUTRAGED at your president and GOP congress signing a sending bill that increases the national debt MORE than Obama ever did...and increases the debt ceiling - or are you a hypocrite? What SAY YOU? Are you fighting mad about it!
OR are you going to offer up some sort of excuse FOR it....
NOW who's the liberal?
“you have to start off with an ad hominem attack on my character.”
You attack Trump, I attack you. It’s how the world works, Sunshine. If you can’t take it, then don’t dish it.
The American economy is strong, but we are not isolated from the rest of the world. Trump's trade war with China is just but will disrupt the supply chain going forward. Europe is slowing and Brexit is the 800 pound gorilla in the room. Then there is ever expanding consumer and government debt. The conditions exist for recession, the question becomes when.
What is happening is we are seeing a GLOBAL slowdown in the GLOBAL economy. That is what some on this site are missing (and it's not some big BLS conspiracy). This is called the business cycle. People here are failing to remember that US manufacturers don't just deal with the realities of a trade war - but with a global economy.
SO: We export about $2.5 TRILLION a year in goods. About $1 trillion of that is in the manufactured category.
OK - so If there is a GLOBAL economic slowdown - which there is (Europe is tanking HARD...and China is tanking badly as well) - then there is LESS of a demand for manufactured goods. PMI will lead the way in showing whats coming - JOBS data will lag.
As to your question about the trade war and who it will impact the PMI - it does it like this: It makes factories nervous....given the slow down in Eurpoe and Asia ALREADY (China and Japan). If a factory thinks the trade war will HURT China (which is basically what Trump is really trying to do I think - he's repeating what Reagan did with the Soviets): Why would they maintain the same production level if nobody will buy their goods at the same rate? They won't have anyone to export them to. They won't have buyers in Europe or Asia - the two top importers of their goods. SO - they are putting on the brakes.
We saw a collapse last spring in the Baltic Dry Index (BDI) - which is the global shipping index. Now we are seeing a spike but yet manufacturing is falling. We've seen this before. What that USUALLY means is that manufacturers are rushing their goods out to market before a global recession hits. Usually, a spike in the BDI is a GOOD sign - but also correlates with a FALL in the price of gold. ANYTIME you see a spike in the BDI and a spike in gold - it means global players know a global recession is coming. This last happened in 2007-2008. Coincidently, the PMI began dipping in January of 2007 (and the first 2/10 yield inversion was late 2005). It then went totally negative in 2007.
A global recession will reach us. Deutsche Bank is on the brink of collapse. They have about $75 TRILLION in derivative exposures WORLDWIDE. This will make Lehman brothers look like the Continental Illinois National Bank and Trust Company failure of 1984. IOW - it's small potatoes compared to DB. DB will drag a lot of banks down with it. The question is WHEN. Personally - I think it will be timed for next spring (or late winter)...and Trump won't have a chance to fight off the recession that's coming. That's how I think they (the globalists) take him out. They collapse the system. That's why I am so against rate cuts now...it takes away all of our ammo to fight the monster when it appears. I think given CERTAIN conditions we COULD be a flight to safety in a world banking collapse - IF our banks were able to offer some % ROI. But - if we lower rates NOW - we won't be able to do that when they collapse the system to take him out. That's just my opinion - we will see if that is what happens or not.
Under Obama the Prime Rate was at 3.25% from December 2008 to December 2015.
As late as December 2016, the Prime Rate was 3.5%, but the Fed started raising rates as soon as Trump was elected. Before he was even sworn in the Fed raised rates to 3.75%.
In March, June, and December of 2017, the Fed raised rates by another 0.25%.
In 2018 the rate was raised further in March, June, September, and December arriving at 5.5%.
This was a 63.6% increase over the starting December 2016 rate.
While Trump was lowering taxes to spark the economy, the Fed was raising rates to slow the economy.
It’s actually amazing that our economy took off like it did considering.
Now Trump wants them lowered. Well sure, why wouldn’t he?
Sparking the economy is exactly what his goal has been. The Fed was nothing more than a deep state actor in all this.
What evidence was there of a runaway inflation? None. A number of well positioned heavyweight financial people made public statements talking about what a perfect economy we had.
There was growth. There was record low unemployment for Blacks, Latinos, and Women. There was no sign of inflation. None the less, the Fed raised rates by 63.6%.
When the economy grows, more people work, and there is higher production, the federal tax revenues expand as payroll taxes come in.
There’s nothing wrong with that sort of tax revenue expansion either.
You have really bought off on the Leftist’s ploy to talk down the economy. What the hell is wrong with you?
The Prime Rate isn’t near it’s historic lows.
Obama was gifted with a 3.25% rate for seven of his eight ears in office. That was a historic low. It is 5.25% now.
If the Left can convince enough nut-jobs that the economy is in a tail-spin, Trump will have more trouble being re-elected next year. Now you be a good girl, and go mouthing off across the internet about how the economy must be in bad shape, simply because Trump has called the Fed on raising rates unreasonably. Do everything you can to help the Democrats deflate the perceptions of one of the best economies in our history.
Manufacturing is returning. Employment is at historic or near historic lows on several counts. Tax receipts are increasing.
Just damn, what a terrible economy... /s
Who the hell’s side are you on?
I notice you didn't answer the question. That's how liberals do it. You're all for raising the deficit and increasing spending JUST like a liberal. Yep - HYPOCRITE. It's not about sticking to ANY CORE principles.
And I explain myself in post 32.
Now explain yourself and why you had such a problem with democrats increasing our debt so much but have no problems with republicans increasing it MORE. That seems like something a liberal would do.
derivatives
Financial unicorns to my way of thinking. Despise those things.
Yep. I'm a 32-year retired military guy and now I am in full-time finance. Derivatives are more dangerous than being in Fallujah in 2004 without an Up-Armored Humvee. The best description of them is in the movie "The Big Short" - which everyone with interest in the markets should see - the Casino Scene. They are basically bets on the bets that people are making bets on. One wrong move and the whole system implodes.
DB has a $75 TRILLION (!!!) derivatives exposure...and that's just them. Who knows what Credit Suisse has - and the rest of the Euro gang.
But here are some guesses in terms of the US Banks:
Citi: $47 trillion
JP Morgan: $47 Trillion
GS: $41 trillion
BOA: $33 trillion
Morgan Stan: $28 trillion
Total of top 25 Banks: Over $250 Trillion in the US alone. I've read that the total worldwide is about $1 Quadrillion.
Just imagine what a total derivatives collapse would look like.
“$1 Quadrillion”
“Pretty soon we’re talking real money.” Tom Tancredo (IIRC)
Let’s see: $1,000,000,000,000,000
Do I have enough zeros?
Europe is in the midst of a serious recession, our manufacturers are slowing due to the decreased exports
My tinfoil hat says that derivatives exposures are all a part of the globalists plan to collapse the world economic system to drive us to a one-world currency. It' a piece of the puzzle; another piece being to ensure every country is in some form of debt to everyone else. That way when it all falls apart - when can do a massive "do-over."
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