The Institute for Supply Management released its widely-followed index of manufacturing activity today. The data show that the US manufacturing sector contracted in June for the first time since July 2009. Given economic weakness elsewhere in the global economy, we should see this as a troubling sign.
Of particular concern is the drop in new orders, where the New Orders Index dropped 12.3% in June to a recessionary 47.8%. All of the major subindices I follow, new orders, production and employment, declined.
About a year ago I correctly predicted that the US manufacturing sector’s growth had already started its cyclical descent, calling the peak in early March. What we have witnessed since then has been a steady decline in the growth in that sector, arrested to a degree by polic...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.