Posted on 08/01/2025 7:48:34 AM PDT by lasereye
U.S. manufacturing contracted for a fifth straight month in July and factory employment dropped to the lowest level in five years amid tariffs that have raised prices of imported raw materials.
The Institute for Supply Management (ISM) said on Friday that its manufacturing PMI dropped to 48.0 last month from 49.0 in June. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 10.2% of the economy.
Economists polled by Reuters had forecast the PMI edging up to 49.5. The weak PMI reading is consistent with economists' expectations for a slowdown in activity in the third quarter as the effects of the import duties become more apparent.
The ISM survey's forward-looking new orders sub-index rose to 47.1 from 46.4 in June but this was still a contraction for the sixth consecutive month. Its production measure increased to 51.4 from 50.3 in the prior month.
Despite the rise in production, factories continued to shed jobs. The survey's measure of manufacturing employment decreased to 43.4, the lowest level since July 2020, from 45.0 in June. The ISM has noted an "acceleration of headcount reductions due to uncertain near- to mid-term demand."
Delivery times improved last month, helping to slow the pace of increase for input prices. The ISM survey's supplier deliveries index dropped to 49.3 from 54.2 in June. Its gauge of prices paid by factories for inputs declined to a still-high 64.8 last month from 69.7 in June.
Government data on Thursday showed goods prices increased in June by the most in five months, with economists saying this was the start of a tariff-driven rise in goods inflation that they expected to persist through the second half of the year.
(Excerpt) Read more at finance.yahoo.com ...
Meanwhile Trump announced a bunch of new tariffs today.
Stock market is crashing today - although it was overextended anyway. It was due for a drop.
Wait, Wait, Wait how can this be? I thought everything was sunshine and roses to hear many claim!
The hits just keep coming.
Politically, this isnt good.
They are jumping on it full bore.
Doesnt matter that the prior administrations economic policies have just ended. That’ll be ignored.
Reagan had to suffer even worse than this. Yet he dragged us out of it.
R Reagan was one great president.
The MAGA propaganda machine is just as bad as the democrats propaganda machine. The citizen taxpayers find out months later that we have been lied to AGAIN!
King Trump better stop worrying about these tariffs so much and focus more on the voters and improving their lots in life, get this inflation down, prices down, put more money in the Voter’s pockets...
IMHO, it looked like we were heading towards a cyclical slowdown even before Trump took office.
Additionally, Trump with his tariffs, the Biden era sanctions on Russia... There is some uncertainty and trade issues that may slow things down.
BUT, I think the long term future is bright. As trade deals are hammered out which are more favorable (don’t throw the US worker under the bus), as the conflict in Ukraine ends (pray that unnecessary carnage ends), with deregulation, and lower taxes...
I hope this ushers in another 1980s Reagan era economic boom.
“Stock market is crashing today”
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A 1 or 2 per cent drop is not a crash. Not even close.
Once we get full tariff reciprocal rates we can gauge how the economy will prosper. Rates still don't hit until Aug 07, with the named countries, still pauses with Mexico and China until later.
Production and New Orders increased significantly. Delivery times decreased significantly. No doom. No gloom. All is well and getting better.
The thing is if the Citizen doesn’t have money to spend then tariffs will not do a lot of good.
1. The tariffs are so haphazard and incoherent that it’s easier for a foreign manufacturer to pay the tariff up front and see what emerges as a “permanent” policy down the road.
2. No minimally competent CEO of an international company is going to make major decisions to relocate production capacity based on tariffs that may change in three years, or even three hours.
When jobs are filled hirering rate drops who knew.
Putting the tariff boot on our Friendly nationals and possible future allies sucks as well.
If one was to write on how to piss off allies and not build a coalition against China, this is how you would do it.
There’s a downside to tariffs (which a lot of people apparently don’t believe). They seemingly believe they could be raised to any level with no possible negative impact. That’s lunacy.
They needed to be strategic in how they imposed tariffs so as not to be disruptive. A well thought out plan would have calculated the effect of the tariffs on various industries. It doesn’t appear that they did that.
There’s no good case to be made for throwing tariffs on everything out there imo.
I am guessing that reshoring of manufacturing won’t kick in in a big way for a couple of years or so.
The tariffs are causing a lot of uncertainty in manufacturing sectors. There’s a lot of gyrations and scrambling to either find new sources of supply, get customers to accept the tariffs, or the worst, just wait for stability. Once everything settles I think things will be very robust.
But for now its a real crimp on the economy.
Wait, Wait, Wait how can this be? I thought everything was sunshine and roses to hear many claim!
/
Amazing what deporting illegals can accomplish
This IS good news, jobs for citizens opening up
Manufacturing will rebound BIGGLY
Interestingly, the chaos and disruption of Trump’s tariff policies are part of the strategy. Up to this point, our trading partners seem to be willing to accept tariff agreements favorable to the U.S. just to make the chaos and disruption end.
“The thing is if the Citizen doesn’t have money to spend then tariffs will not do a lot of good.”
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The consumer is carrying record levels of debt. Not saying we’re in trouble, just that a combination of inflation and increased debt could suppressing spending.
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