ever notice how certain news always winds up being released on friday nights, during holiday weeks etc., when a minimum number of people are paying attention ???
(snip)Manufacturing sector shrinks for first time in three years
Even though this week will have most Americans distracted from the news while celebrating Independence Day with families and friends, that doesn’t mean that there won’t be important news this week. On Friday, we’ll get the jobs report from June, which so far doesn’t look promising, as well as a precursor report from ADP on private-sector job growth, as well as other economic indicators for the previous period. Yesterday, one of the biggest came out — and it was bad news for the US economy. Manufacturing “plummeted,” Reuters reported, according to the composite index from the Institute of Supply Management:
U.S. manufacturing shrank in June for the first time in nearly three years as new orders plummeted, according to one measure of the sector that provided a stark sign of the economic recovery’s slowdown.
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.
The Associated Press analysis says to expect Q2 to come in even weaker than Q1′s stagnation-level 1.9% GDP growth, although perhaps not yet a recession-level number:
Economists said the manufacturing figures were consistent with growth at an annual rate of 1.5 percent or less. That would be down from the January-March quarter’s already tepid annual pace of 1.9 percent.
“Our forecast that the U.S. will grow by around 2 percent this year is now looking a bit optimistic,” said Paul Dales, an economist at Capital Economics. …
Most economists aren’t yet predicting another recession. Though the ISM report suggests manufacturing is contracting, it typically takes a sustained reading below 43 to signal the economy isn’t growing.
Still, U.S. manufacturing, which has helped drive growth since the recession ended, is faltering at a precarious time.
Jim Pethokoukis isn’t as optimistic:
But these numbers are just the latest in a long string of worrisome reports including rising initial unemployment claims, slowing job growth, falling consumer confidence, and declining durable goods orders. Oh, and the rest of the global economy is slowing, too.
The rule-of-thumb recession indicator is back-to-back-quarters of negative GDP growth. But the National Bureau of Economic Research, the group that makes the “official” recession call, uses a broader and more nuanced approach:
It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income. The Committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve’s index of industrial production (IP). The Committee’s use of these indicators in conjunction with the broad measures recognizes the issue of double-counting of sectors included in both those indicators and the broad measures. Still, a well-defined peak or trough in real sales or IP might help to determine the overall peak or trough dates, particularly if the economy-wide indicators are in conflict or do not have well-defined peaks or troughs.
It takes more than one bad report for a recession, of course, but this isn’t just an outlier of a result either. (snip) from
(snip)Wages drop, only 5th time in 33 years
Unemployment ebbs and flows, but one measure of the nation's economic health, average weekly wages, rarely dips.
Until now. In the latest demonstration of the struggling economy that threatens President Obama's reelection, average weekly wages fell in 2011, one of only five declines since the category was created in 1978 by the Bureau of Labor Statistics.
In a just-released review of employment in the nation's largest 322 counties, BLS found that weekly wages dropped over the year by 1.7 percent to $955 in the fourth quarter of 2011 from a high of $971 in the fourth quarter of 2010.
That means the $50,000-a-year mark, busted in the fourth quarter of 2010, has dropped back to an average yearly salary of $49,660. And the wage depression was widespread: 282 major counties suffered wage declines; just 36 saw increases.
The wage drop comes as employment has increased in a majority of the counties in the last quarter of 2011, said the agency. That irony makes it the only quarter in history where wages shrunk while employment grew, a grim reminder that more Americans are taking additional jobs to make ends meet.
The Labor Department agency added that smaller bonus payments in the fourth quarter helped to push weekly wages down.(snip) from



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