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October US Manufacturing Output Tumbles To 2009 Levels
While hardly as followed as the other two key US manufacturing indices, the Mfg ISM and the Chicago PMI, the recently introduced Markit PMI, which comes from the same firm that tracks manufacturing data across the rest of the world, shows that in addition to the sliding job picture in September (and soon October), one other aspect of the US economy that took a big hit in October was manufacturing. As Markit just reported, "the U.S. manufacturing sector grew at its weakest pace for a year in October... based on approximately 85% of usual monthly survey replies. The flash PMI index registered 51.1, down from 52.8 in September, and was consistent with only a modest rate of expansion." Not only was this the lowest headline print in one year, and should the drop continue it would be the worst print since 2009, not only was the New Order index had its weakest number in 6 months, but worst of all, the Output index, plunging from 55.3 to 49.5, had its first contrationary print since 2009!
Headline Mfg PMI:
And the suddenly plunging Output index:
The full data table:
Summarizing the atrocious print is Chris Williamson, Chief Economist at Markit said:
“The flash PMI provides the first insight into how business fared against the backdrop of the government shutdown in October, and suggests that the disruptions and uncertainty caused by the crisis hit companies hard. The survey showed the first fall in manufacturing output since the height of the global financial crisis back in September 2009. We can expect GDP growth to have suffered a set-back in the fourth quarter, but it is too early to estimate the extent of the slowdown. It is impossible to disentangle the impact of the shutdown from other factors that might have been at play during the month, so equally impossible to judge the extent to which business might bounce back in November.
“The Fed will be equally unsure of the underlying health of the economy, and will no doubt want to see the economic data stabilise, which could take until the end of the year, before making any firm policy decisions.”
Of course: bullish spin. How else.
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I picked the wrong week to stop cooking numbers.
OK....who swiped my tube of glue?
African't..
I saw a presentation this week in Orlando by these folks and I believe they have their finger on why manufacturing has been in the tank in the USA for a generation or more.
http://www.prosperousamerica.org/
The proliferation of the idea of a global one world government is really put on display with the adoption of trade treaties that remove a nation or state's sovereignity.
The Trans Pacific Partnership may be the final nail in the coffin of America's once prosperous manufacturing base.
DaddyO
NAFTA
MY "Made in America" GM vehicle contains 50% of parts from Mexico and another 30% or so from Canada. But by golly it is assembeled by those patriotic UAW workers in Flint.
... and 20% of parts from far east (China, Vietnam, Laos, Slovakia-it is far east in EU's term etc), I assume.
And if you want complain about it, there is a call center in India. :)
From their store, you can buy a $175 pair of dull ass jeans made in america.
http://www.cpabuyamerican.com/BB_Nationalist_Jeans_p/a14-bbn.htm
I think NAFTA may have shielded the consumer from inflation as well...
So are you saying that the balance of trade was unfairly tipped towards those countries that subsidize their manufacturing base due to NAFTA or CAFTA.
I sold a manufacturing company in 2001 because I couldn't compete for a host of reasons, primary of which is the fact that China was subsidizing their push to grab up manufacturing market share with currency manipulation, deep discounts and promises of reduced product to market tiimeframes.
With reduced US manufacturers, US prices have no choice but to escalate to reflect these manipulations.
DaddyO
http://www.governor.state.tx.us/files/ecodev/Texas-Automotive-Industry-R...
Page 10
"I'M going off the rails of a crazy train"
Ozzy Osbourne
"Only MOAR QE can solve this problem." Janet Felon, 2013.
She actually said "I am a Whoar for Moar!" though Ben is credited with the original statement while waiting for a Goldman limo at the corner of Wall Street & New St so he could turn tricks for Llyod!
Good luck with that....$1Trillion/week won't be enough real soon.
Print all the paper promises you want, it takes calories in order to actually manufacture anything of real value.
Could I interest you in a financial "product" of mass destruction? Roll the motherfucking guillotines...
Can't live off cotton candy, no matter how much of it there is.
You can, you just won't have any teef.
Wait till the shitfest of Black Thursday this holiday season. Businesses are struggling, Macy's and JCP will be open all day Thanksgiving for the first time in ALL HISTORY. No one has any money to spend.
Well then, that sounds like it'll be good for +300 on the DJIA.
They're already pre-whining about holiday shopping consumer monkey season, since Thanksgiving is 'late' this year they're wringing their hands there's just not enough time to make numbers....no time....
Blame the weather
GREAT NEWS! The depression is getting so bad, the measly $85B/month is no longer helping. WE NEED TO PRINT MORE!!!
Compounding interest on existing debt and exponentially growing liabilities...
"Winning"
I see China just "erased" a whole bunch of their debt, so should we.
I know this one....we should immediately raise interest rates?
Either that or roll out carbon taxes....do I win something?
"I see China just "erased" a whole bunch of their debt, so should we."
It really is the only way.
Stores were empty last year during the holiday season. People will be lining up for the 1am opening of Dollar General this year, instead of Wal-Mart or Best Buy.
And they will claim internet sales are way better than they are since it is easier to hide and cook. Digital means are being used all over to mask the fact we are in a fucking economic depression. The FED is going to have to literally fly in the helicopters to save consumer christmas this year or the masses turn on them come January.
Call in the chinooks, helicopters can no longer carry the load.
RrrrrELEASE THE CHINOOKS!
Dollar General is so 2012. This year, I'll be buying my Christmas presents at Trillion Dollar General.
Christmas dinner will be picked up at McDonalds off their $10 Menu. You get a 50% meat pattie burger with no dressings and a small soda.
Don't worry though, Boston Market prices will remain the same as the quality of their food can go no lower.
Trillion Dollar General
Everything costs an ounce of platinum....it's so convenient!
Another reason physical backed currencies fail, no one can carry around their 21,000 ton platinum coins!
Instant replay of 2009. BDI, CAT, Manufacturing. Nearly identical. Now we only need to see the Russel do the same tricks it did in 2009.
I wish. If that is the case, then "FAZ" me bro...
2009 all over again?
yet all the banks are projecting a hockey stick GDP. it's all going to miraculously turn around in 4Q.
based on what? skyrocketing insurance premiums? huge property tax hikes? $4+ gas?
Plastics.
You know, for kids.
You simply don't understand "mark to fantasy" accounting. Leave this to the professionals and ignore your lying eyes.
< sarc off >
Hey it's got to be good stuff. It's built of unicorn kisses and bankers well wishes. They are all consumate professionals, what could possibly go wrong.
Maybe I need to get some moar skooling and stuff, but how can a precipitous drop to 2009 levels be described as "growth", as in: "the U.S. manufacturing sector grew at its weakest pace for a year in October"? I get that they're only looking at a year's figures and this is where they're coming up with "growth", but shit, surely trends can't be discerned by only looking at a year's figures? I picked the wrong week to stop sniffing glue, it seems. Yeah, yeah, and I won't call you Shirley.
Double take! I figured with manufacturing going the way of extinction, a return to 2009 levels would actually mean growth!
If the mainstream press is still a reliable contrarian indicator, we may be close to a top (at least in Nasdaq)...I was reading in the New York in the few weeks two 'tech' profiles, one on Jack Dorsey, the other on some kid-angel investor who made a few million making some apps & parlayed that into new social paradigm of communal living....this could change society. san francisco. blah blah blah...same as it ever was. Haigh Ashbury 1965, Mission District 1995, and now 2013 (didn't catch the neighborhood).
Bullshit, if the Fed increases their purchases, then the top can go as high as they choose. At least as long as the supply lines hold. Once food and fuel are not getting to the average sheep, then and only then will shit get real.
Same as it ever was.
Tumbles? 55-50 is a tumble? I beg to differ, its a DROP.
The tumble was from 50-30 mid 2008.
Can we use more ominous words to describe smaller changes? Maybe add some adjectives.
TREMENDOUS TUMBLE
I knew you could do it ZH.
BULLISH IT!TM
Considering the absolute insane amount of made up bullshit in the numbers today, 55-50 is a major drop.
Most of what is manufactured never sells. For the past five years inventory levels have been building, but real sales haven't. Most of this inventory is sitting in warehouses and will never be shipped. The corporations producing it don't care, inventory is now an asset instead of a liability. If they increase production and send a regional PMI up, their stock explodes higher.
Real sales have never been worse. Absolutely nothing is moving at the retail level. Checkout volume at stores like Dick's is down 40%. If you take away guns and ammo, I doubt a store moves more than $500 a day in inventory.
Hey Semantics Man,
Check the $85B print per month for the last five years.
If you can't figure that we're in deep shit, then go run out and finance MOAR CARS and MOAR HOUSES.
Your lefty media is brain locked into "hyperbole space" - so playing gotcha here is not interesting.
Use any synonym you wish that chart shows a trend V.
Very Scary Barry fucking with deflation to make it into inflation.
Print faster Barry you fucking cocksucker!!!!
Manufacturing tumbles, Baltic Dry bear, idiotic initial claims.
BTFD!
To the moon!
LMAO!! FORWARD! BTFATH you damn peasants!
Damn, I really hope there's still a US manufacturing industry when I have a prototype ready sometime next year.
Whatever you want to make, there are far better places to make it than the USA.
Until that sad fact changes, you really are better off.
And be like every other mook who says they love America while manufacturing in communist China and importing Indians on H1Bs?
I don't think so.
If Americans aren't willing to believe in America, why should anybody else?
Great news, DOW should go up 300 pts.
SPY green, clearly this news is bullish!
Who needs manufacturing when you have the Fed buying stocks?
Their buying everything, except the value of the US dollar. It should be crashing.
I didn't know National Parks ordered so much product from our Nation's manufacturers.
We have to make sure never to close them again. Look at the damage the Republicans caused.
/s
There is no way the government shutdown for a few days effected manufacturing numbers for October. Manufacturing is not an instantaneous activity. Orders and production timetables are set months in advance.
The European macro news chart is horrid this morning, with the exception of Spains unemployment rate dropping from 26.26% to 25.98%. winning> forward ho...
Shows what a ass backwards country Spain is. They need to get into the Progressive 21st century and only list people actively looking for jobs as unemployed.
and input costs keep climbing...
Isn't saying US Manufacturing like saying:
jumbo shrimp
honest politician
US recovery
civil war
the sound of silence...
All bullshit Orwellian double-talk?
Uh....does anbody else find the title of this article misleading?
I look at those charts and it does not show it at 2009 levels.