Thank you Donald Trump ... U.S. Manufacturing Gauge Contracts for First Time in Three Years

[Denizen]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

 

[Mac1958]

Teetering.

 

[mdk]

I'm quite cautious, but always hopeful. We're a fine position no matter what the future holds, but others are not so fortunate.

 

[shockedcanadian]

Check out the rest of the world. Canada lost something like 61,000 private sector jobs last month, 31,000 in Ontario alone. All replaced by part-time, government, temp. The bankruptcy rate here is soaring, housing and rental affordability as well.

Just crush China and prosper. Guaranteed. If the Fed is doing their job a nice half point cut might be coming soon.

 

[NightFox]

Teetering.

Yeah well... 10 year recovery phase of the business cycle is way long in the tooth, our current system won't allow it to go on forever and the bond market is screaming that it's time to batten down the hatches; been a fairly nice run though.

I do however believe that Donny *could* facilitate extending the peak of the cycle a bit longer if he would get his shit together and work out this trade spat with the Chinese, IMHO it's well past the point of ridiculous since the Donald missed his opportunity to get the concessions he wants out of the Chinese early last year.

Get something positive out of a deal that doesn't involve sticking our fingers into China's sovereignty, declare victory and move the on.

"If something cannot go on forever, it will stop." -- Herbert Stein

 

[Third Party]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

We are in a trade war dummy! Pull up your big boy pants-its time to take China to the woodshed.

 

[shockedcanadian]

Teetering.

Yeah well... 10 year recovery phase of the business cycle is way long in the tooth, our current system won't allow it to go on forever and the bond market is screaming that it's time to batten down the hatches; been a fairly nice run though.

I do however believe that Donny *could* facilitate extending the peak of the cycle a bit longer if he would get his shit together and work out this trade spat with the Chinese, IMHO it's well past the point of ridiculous since the Donald missed his opportunity to get the concessions he wants out of the Chinese early last year.

Get something positive out of a deal that doesn't involve sticking our fingers into China's sovereignty, declare victory and move the on.

"If something cannot go on forever, it will stop." -- Herbert Stein

No. Your success runs through China, by beating them, Taking back jobs and as importantly, finding other import sources.

Why would you want to do a deal with the devil? Do you see what they are doing to their own citizens? What do you think they have planned for you?

It must be a good deal or no deal. Capitalism depends on it.

 

[Mac1958]

Teetering.

Yeah well... 10 year recovery phase of the business cycle is way long in the tooth, our current system won't allow it to go on forever and the bond market is screaming that it's time to batten down the hatches; been a fairly nice run though.

I do however believe that Donny *could* facilitate extending the peak of the cycle a bit longer if he would get his shit together and work out this trade spat with the Chinese, IMHO it's well past the point of ridiculous since the Donald missed his opportunity to get the concessions he wants out of the Chinese early last year.

Get something positive out of a deal that doesn't involve sticking our fingers into China's sovereignty, declare victory and move the on.

"If something cannot go on forever, it will stop." -- Herbert Stein

Funny you would say that. I had just posted this: Trump & China: Just a Theory
.

 

[easyt65]

Donald Trump has screwed up the nicely rising economy Obama left him.

Just when you think snowflakes could not LIE any more than they already have / do....Enough of the bullshit lie about how Barry left Trump the economy we have now - time to kill it once and for all.

Barak Obama abandoned the US economy to mediocrity at best and failure at the worst. He openly declared that the factories President Trump brought back to the US were GONE FOREVER, that this was the NEW NORM, that this was never going to change....yet somehow deranged lunatics like the OP cling to their LIE that lacks the most basic common sense.

Obama gave up on / abandoned any hope of bringing US factories and jobs back from overseas to the US...so there is no intelligent way to claim he, then, was the reason they came back, which was a huge part of turning the economy around and it being so successful.





'Nuff said.

 

[Toddsterpatriot]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

Donald Trump has screwed up the nicely rising economy Obama left him.

Not sure I'd consider 2016's +1.6% GDP growth "nicely rising".

 

[Harpy Eagle]

Donald Trump has screwed up the nicely rising economy Obama left him.

Just when you think snowflakes could not LIE any more than they already have / do....Enough of the bullshit lie about how Barry left Trump the economy we have now - time to kill it once and for all.

Barak Obama abandoned the US economy to mediocrity at best and failure at the worst. He openly declared that the factories President Trump brought back to the US were GONE FOREVER, that this was the NEW NORM, that this was never going to change....yet somehow deranged lunatics like the OP cling to their LIE that lacks the most basic common sense.

Obama gave up on / abandoned any hope of bringing US factories and jobs back from overseas to the US...so there is no intelligent way to claim he, then, was the reason they came back, which was a huge part of turning the economy around and it being so successful.


View attachment 277394


'Nuff said.

Jobs have not come back from overseas, why do you pretend that they have?

We might have created some new ones, but jack shit has come back

 

[NightFox]

Teetering.

Yeah well... 10 year recovery phase of the business cycle is way long in the tooth, our current system won't allow it to go on forever and the bond market is screaming that it's time to batten down the hatches; been a fairly nice run though.

I do however believe that Donny *could* facilitate extending the peak of the cycle a bit longer if he would get his shit together and work out this trade spat with the Chinese, IMHO it's well past the point of ridiculous since the Donald missed his opportunity to get the concessions he wants out of the Chinese early last year.

Get something positive out of a deal that doesn't involve sticking our fingers into China's sovereignty, declare victory and move the on.

"If something cannot go on forever, it will stop." -- Herbert Stein

No. Your success runs through China, by beating them, Taking back jobs and as importantly, finding other import sources.

Trade creates wealth and while we're playing patty-cakes with the Chinese over concessions that are NOT going to happen wealth creation is being stifled for EVERYBODY. There are indeed structural imbalances that should be addressed but President Twitter missed the opportunity to get some/most/all of those addressed, now that the Chinese have dug in their heels it's too late.

Donny is going to have to take what he can get OR risk losing the election next year as a result of an economic downturn, the Fed isn't going to be able to extend the peak on its own under these circumstances.

Why would you want to do a deal with the devil? Do you see what they are doing to their own citizens? What do you think they have planned for you?

I'm far less worried about what the Chinese "have planned for me" than I am regarding what the authoritarian, liberty destroying, income stealing plutocrats in Washington are actually doing right now.

It must be a good deal or no deal. Capitalism depends on it.

First "good deal" is subjective so it's a meaningless term and how in the heck to you figure "capitalism depends on it"?

 

[NightFox]

Teetering.

Yeah well... 10 year recovery phase of the business cycle is way long in the tooth, our current system won't allow it to go on forever and the bond market is screaming that it's time to batten down the hatches; been a fairly nice run though.

I do however believe that Donny *could* facilitate extending the peak of the cycle a bit longer if he would get his shit together and work out this trade spat with the Chinese, IMHO it's well past the point of ridiculous since the Donald missed his opportunity to get the concessions he wants out of the Chinese early last year.

Get something positive out of a deal that doesn't involve sticking our fingers into China's sovereignty, declare victory and move the on.

"If something cannot go on forever, it will stop." -- Herbert Stein

Funny you would say that. I had just posted this: Trump & China: Just a Theory
.

Cool, great minds do drugs and mock partisan pinheads.

 

[Brain357]

Donald Trump has screwed up the nicely rising economy Obama left him.

Just when you think snowflakes could not LIE any more than they already have / do....Enough of the bullshit lie about how Barry left Trump the economy we have now - time to kill it once and for all.

Barak Obama abandoned the US economy to mediocrity at best and failure at the worst. He openly declared that the factories President Trump brought back to the US were GONE FOREVER, that this was the NEW NORM, that this was never going to change....yet somehow deranged lunatics like the OP cling to their LIE that lacks the most basic common sense.

Obama gave up on / abandoned any hope of bringing US factories and jobs back from overseas to the US...so there is no intelligent way to claim he, then, was the reason they came back, which was a huge part of turning the economy around and it being so successful.


View attachment 277394


'Nuff said.

Trump is doing no better than Obama. Easy to argue worse actually.

 

[pyetro]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

Republicans will blame Hillary.

 

[jknowgood]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

We are in a trade war dummy! Pull up your big boy pants-its time to take China to the woodshed.

You forget who you're talking too. It's his big boy panties.

 

[Mac1958]

The Right's vaunted Laffer Curve is flat-lining.

It'll be someone else's fault, though.

 

[Denizen]

Donald Trump has screwed up the nicely rising economy Obama left him.

Donald Trump is losing the trade war with manufacturing and agriculture down.

The ISM manufacturing index is falling sharply. Export orders are falling sharply as Trump tramples brand America.

"A measure of export orders, a proxy of overseas demand, sank to 43.3, the lowest reading since April 2009 during the depths of the last recession."

US exports also declined by 2+% year on year and are probably heading lower as Donald Trump has disrupted the whole international trade system with tariffs on friends and enemies alike.

U.S. Manufacturing Gauge Contracts for First Time in Three Years

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

The data add to concern a broader U.S. recession is coming and may complicate the re-election chances of President Donald Trump, whose pledges to revive manufacturing have been a signature issue. At the same time, Trump’s escalating tariffs on imports from China have been a major reason behind factory weakness that threatens to spread to consumer spending, which accounts for about two-thirds of the world’s largest economy.

In the U.S. stock market, the ISM numbers torpedoed a morning rebound and left the S&P 500 poised for its worst loss in seven sessions, down as much as 1.2% to erase almost half of last week’s rally. The 10-year Treasury yield and the dollar fell.

Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year, following a July 31 quarter-point cut that was the first since 2008. For the next Fed decision on Sept. 18, investors increased bets on a half-point reduction but continued to lean toward a quarter-point cut.

“This piece of data is part of the puzzle that helps to push us into recession,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “The ramifications of the trade war show up in the euro zone, in Asia and now in the U.S. If the deterioration in the U.S. continues, it’s going to feed into the overall labor market.”

What Bloomberg’s Economists Say

“To be sure, economic anxiety related to tariffs and increasing trade tensions is extracting a significant toll on business confidence. However, there was limited direct evidence of tariffs creating upward price pressures or materials shortages in the details of the report. As such, the second-order impacts from the tariffs (i.e. confidence effects and currency appreciation) appear to be having the more substantial impact.”-- Carl Riccadonna, chief U.S. economist

Although manufacturing only makes up about 11% of the U.S. economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.

Transportation equipment was one of seven industries in the ISM report to report shrinking business activity last month. Automakers, which report their August sales on Wednesday, account for some of the slowdown. General Motors Co. has ceased production this year at a car plant in Ohio and transmission factory in Michigan, two of the four U.S. sites that it has said aren’t being allocated future product. Other automakers are reducing production shifts, including Nissan Motor Co., Fiat Chrysler Automobiles NV and Honda Motor Co.

Weakness in the automotive and electronics markets is also impacting 3M Co.’s bottom line. Sales and profit at the diversified manufacturer fell in the second quarter even as earnings topped expectations. At Caterpillar Inc., a slowdown in crude extraction from the Permian Basin, the largest U.S. oil patch, is reducing demand for machinery. What’s more, the equipment maker’s worldwide machine sales in June and July were up 4%, the slowest in two years.

Manufacturing is technically already in a recession in the U.S. with a Fed measure of output declining in two consecutive quarters. The malaise is consistent with developments in the sector around the world. By one measure, global factory activity has contracted for four straight months.

The ISM’s measure of new orders, which are tracked by some as a leading indicator of a downturn, declined to 47.2. It was the first time since December 2015 that the gauge fell below 50. ISM’s production gauge also sank below that mark, to 49.5 in August from 50.8.

We are in a trade war dummy! Pull up your big boy pants-its time to take China to the woodshed.

Trump is in a trade war and China has bent him over. Less than 50% of the US population are with Trump on the trade war.

 

[Denizen]

Donald Trump has screwed up the nicely rising economy Obama left him.

Just when you think snowflakes could not LIE any more than they already have / do....Enough of the bullshit lie about how Barry left Trump the economy we have now - time to kill it once and for all.

Barak Obama abandoned the US economy to mediocrity at best and failure at the worst. He openly declared that the factories President Trump brought back to the US were GONE FOREVER, that this was the NEW NORM, that this was never going to change....yet somehow deranged lunatics like the OP cling to their LIE that lacks the most basic common sense.

Obama gave up on / abandoned any hope of bringing US factories and jobs back from overseas to the US...so there is no intelligent way to claim he, then, was the reason they came back, which was a huge part of turning the economy around and it being so successful.


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'Nuff said.

Manufacturing in the US was rising in 2016. It wobbled after Trump was elected and is now falling sharply as China has Trump bent over.

It takes decades to build reliable competitive supply chains and Trump's words and actions don't cut the mustard.

 

[Denizen]

The emergence of Trump has turned GOP lawmakers invisible, deaf, dumb, and blind.

They just make pitiful bleating noises at photo opportunities where they jostle each other to get close to Trump's anus.