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Today's releases on manufacturing activity and construction were unimpressive, and point to a continuation of the modest growth conditions that have prevailed for some time now.
As the above chart suggests, the June ISM manufacturing index was consistent with GDP growth of 2-3%.
The export orders subindex has risen in recent months, suggesting that conditions overseas have improved on the margin.
The employment subindex was weak, reflecting a lack of business confidence in the future.
U.S. manufacturing activity has not improved significantly over the past year, but Eurozone manufacturing activity has become substantially less weak.
Construction spending conditions to improve at a modest pace overall, with the residential construction sector leading the way.
7 comments:
The future of America will be in the technology sector, not manufacturing -- the US is not competitive globally in manufacturing except in the military-industrial complex and related industries -- that's just the way it is right now in America...
The GNP revision reduces growth to an pathetic 1.8%...
Yes, what growth after four years and a govcession...
Some positive news recaped by Ed Yardini:
"(1) The first trading day of the month tends to be a winner. (2) The M-PMI is always released on that day. (3) Lots of good news in both ISM and Markit M-PMIs for US. (4) Good, but not great, for S&P 500 revenues. (5) Better, but not wonderful, news in M-PMIs out of Europe. (6) Plenty of other solid indicators. (7) Commodity prices holding up despite weakness in Chinese M-PMI. (8) New record high for US trucking index. (9) Rising mortgage rates boosting existing home sales. (10) Tax revenues at new highs. (11) Forward earnings {estimates }at new highs."
ECRI Weekly Leading Indicator Ticks Up
The Economic Cycle Research Institute said its Weekly Leading Index rose to 130.6 in the week ended June 21 from 130.3 the previous week.
The index's annualized growth rate slipped to 5.8 percent from 6.1 percent a week earlier, which was originally reported as 6.2 percent. It was the lowest level since early January.
Looking at these charts, I don't see interest rates heading up anytime soon.
Discouraging, isn't it? To use a human behavior description, it looks like the economy is getting along on a walker, yet the Obama administration is proud of its accomplishments.
Scott, if you read this, I would appreciate your expanding on your comments under the Manufacturing Diffusion Index where you state Eurozone manufacturing has become substantially less weak.
It looks like Euro manufacturing is starting to jog while U.S. manufacturing is crawling. Why is this?
Question to Mr. McKibbin too. Why is the U.S. "not competitive globally in manufacturing" while Germany (a high labor cost country) is?
The diffusion index for the Eurozone is still below 50, which implies shrinking activity. The rise in line means that activity is declining but at a slower pace.
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