In November of 2015, I reported that U.S. Manufacturing was at Recession Levels, but the news has gotten worse. The Manufacturing sector is now shrinking.
In a recent CNN Money article, Patrick Gillespie reported several important statistics about the manufacturing sector:
"The U.S. manufacturing sector shrank in November for the first time in three years, according to the Institute for Supply Management (ISM). The ISM index hit 48.6% last month -- anything below 50% means the sector contracted. The November reading is the lowest it's been since 2009.
The ISM index has declined for five straight months now.
Only five of the 18 manufacturing sectors in the U.S. actually grew.
It's a grim confirmation that the headwinds of the global economic slowdown are hurting factories and plants across the country."
On a related note, I also wanted to mention the Chicago PMI report that came out this morning. In her MarketWatch column, Andrea Riquier reports:
"The index fell to 42.9 from 48.7 in November. Economists had expected it to rise 1.3 points to 50 in the December reading. The index has spent much of the year below the 50 mark that separates expansion from contraction.
Order backlogs were the biggest drag in December, dropping 17.2 points to 29.4. That’s the lowest since May 2009 and marked the 11th-straight month in contraction. The last time such a sharp decline was registered was 1951."
While the Chicago PMI index value of 42.9 is only the latest monthly value for a regional growth statistic, it was a stunningly bad number and the Chicago PMI had already been below 50 for most of 2015.
US Manufacturing was slowing at a rate not seen since the 2001 and 2008 recessions and is now shrinking.Given the continued strength of the US Dollar, the picture is not going to get brighter for the US manufacturing sector any time soon.
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