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- Aug 27, 2011
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Manufacturing shrinks, first time in nearly three years | Reuters
The Institute for Supply Management said on Monday its index of national factory activity fell to 49.7 from 53.5 the month before, missing expectations of 52.0, according to a Reuters poll of economists, and below even the lowest forecast.
It was the first time since July 2009 that the index has fallen below the 50 mark that separates expansion from contraction. That was shortly after the U.S. economy emerged from recession.
Manufacturing has been one of the drivers of the U.S. economic recovery, which now appears to be losing momentum over fears about the euro zone's debt crisis, a slowdown in China and uncertainty over domestic fiscal policy.
"Clearly this is the biggest sign yet that the U.S. is catching the slowdown that is well under way in Europe and China," said Paul Dales, senior U.S. economist at Capital Economics in London.
Dales said the report is consistent with an economy that is growing at an annualized rate of a little below 1 percent after 1.9 percent growth in the first quarter, dismissing talk that the number signaled a new U.S. recession was coming.
A reading below 47 would be consistent with another recession, Dales said.
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Not good news for the country.
Hope this isn't a trend.
The Institute for Supply Management said on Monday its index of national factory activity fell to 49.7 from 53.5 the month before, missing expectations of 52.0, according to a Reuters poll of economists, and below even the lowest forecast.
It was the first time since July 2009 that the index has fallen below the 50 mark that separates expansion from contraction. That was shortly after the U.S. economy emerged from recession.
Manufacturing has been one of the drivers of the U.S. economic recovery, which now appears to be losing momentum over fears about the euro zone's debt crisis, a slowdown in China and uncertainty over domestic fiscal policy.
"Clearly this is the biggest sign yet that the U.S. is catching the slowdown that is well under way in Europe and China," said Paul Dales, senior U.S. economist at Capital Economics in London.
Dales said the report is consistent with an economy that is growing at an annualized rate of a little below 1 percent after 1.9 percent growth in the first quarter, dismissing talk that the number signaled a new U.S. recession was coming.
A reading below 47 would be consistent with another recession, Dales said.
************************************
Not good news for the country.
Hope this isn't a trend.