From the NY Fed:
The Empire State Manufacturing Survey indicates that conditions improved modestly in August for New York manufacturers. The general business conditions index rose 2 points from its July level, to 7.1. The new orders and shipments indexes both dipped below zero for the first time in more than a year, indicating that orders and shipments declined on balance; the unfilled orders index was also negative. The indexes for both prices paid and prices received inched down, while employment indexes were positive and higher than last month. The six-month outlook weakened; though future indexes were generally still positive, many fell in August, with the notable exceptions of the future employment and capital expenditures indexes, which climbed after falling last month.
Here is a chart of the data:
Manufacturing pulled the economy out of the recession. Now it appears it is losing steam.
Part of my thesis for this recovery is that various parts will emerge at various times, but there will not be a cohesive "expanding on all fronts" scenario. That is, instead of having consumers and manufacturers humming along at the same time, we'll see very lumpy growth. Manufacturing has provided part of the first leg of the recovery. Now we'll see if other parts of the economy pick-up.
2 comments:
I wonder if there's any evidence in this that the media can cause serious damage to the overall economy. It's no secret the hyped up the markets to the bitter end before they crashed, but could it have also worked in reverse?
All I've heard is that the economy will double-dip in the face of more optimistic data several months ago, and that businesses are hoarding cash in anticipation to something Obama will do because. . . something. In short, the media convinced businesses to NOT spend capital or hire despite increase sales simply out the fear that ZOMG a DEMOCRAT is in charge, he's gonna raise taxes and pass a bunch of regulations, aaaah!!
The only tax "increase" is the expiration of cuts that had a ten years warning, but don't let that stop our self-fulfilling partisan prophecy!
Dragonchild, the media was ultra-positive on the economy back in March, April, and May despite many indicators showing severe weakness ahead. The media didn't turn negative until very recently. Contrary to popular belief, corporate CEOs don't make investment decisions based on commentary on CNBC.
ABout the tax increase, it almost certainly will affect the economy badly for a couple quarters. This is because individuals and small business owners feel as if the govt is taking from them. So they will save for a little way or not hire or invest to protect themselves or even to seemingly get back at the govt. This feeling that the govt is stealing from them will dissipate in time; IMO a couple quarters. I think we could easily see GDP 1-2% lower than it would be otherwise for those two quarters. And it doesn't matter if the tax increases were telegraphed for nearly 10 years or not. People still won't like it.
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