Friday, February 1, 2013
A quick note about the ISM manufacturing report
. - by New Deal democrat
As you can probably tell from my recent posts, I am in a quandary as to whether the increase in payroll taxes plus other government austerity measures are enough to put this country into an actual recession. If anything, my outlook is getting gloomier.
The shame is that, left to itself, it looks like the economy wants to keep growing. Today's ISM manufacturing report of 53.4 is very potent evidence of that. The index has been reported since 1948. Since that time, only once - for the first six months or so of the 1973-74 recession - has the index ever recorded a reading above 53 during a recession.
Interestingly, or ominously, that recession occurred when a strongly growing US economy ran into the brick wall of the Arab oil embargo. So if a recession is starting, you can blame it squarely on ridiculous contractionary austerity coming from Washington, DC.