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发帖数: 29846 | 1 By CHRISTOPHER S. RUGABER, Associated Press
July 2, 2012
WASHINGTON (AP) — U.S. manufacturing shrank in June for the first time in
nearly three years, adding to signs that economic growth is weakening.
Production declined, and the number of new orders plunged, according to a
monthly report released Monday by the Institute for Supply Management.
The slowdown comes as U.S. employers have scaled back hiring, consumers have
turned more cautious, Europe faces a recession and manufacturing has slowed
in big countries like China.
"This is not good," said Dan Greenhaus, chief economic strategist at BTIG,
an institutional brokerage. Though the report "does not mean recession for
the broader economy, it is still a terribly weak number."
The trade group of purchasing managers said its index of manufacturing
activity fell to 49.7. That's down from 53.5 in May. And it's the lowest
reading since July 2009, a month after the Great Recession officially ended.
Readings below 50 indicate contraction.
Stocks fell after the report was released at 10 a.m. The Dow Jones
industrial average dropped more than 40 points in midday trading.
Economists said the manufacturing figures were consistent with growth at an
annual rate of 1.5 percent or less. That would be down from the January-
March quarter's already tepid annual pace of 1.9 percent.
"Our forecast that the U.S. will grow by around 2 percent this year is now
looking a bit optimistic," said Paul Dales, an economist at Capital
Economics.
Despite the discouraging data, most economists aren't predicting another
recession. Though the ISM report suggests manufacturing is contracting, it
typically takes a sustained reading below 43 to signal the economy isn't
growing.
Still, U.S. manufacturing, which has helped drive growth since the recession
ended, is faltering at a precarious time.
Americans have pulled back on spending, which drives roughly 70 percent of
growth. Europe's economy is likely in recession, which has hurt U.S. exports.
And China's manufacturing sector grew in June at its slowest pace in seven
months, according to a survey released Sunday by the state-affiliated China
Federation of Logistics and Purchasing.
The sharp drop in U.S. factory activity overshadowed more positive news on
housing. U.S. construction spending rose for the second straight month,
though spending remains well below healthy levels.
Manufacturing will likely stay weak for the next few months. The ISM's gauge
of new orders, a measure of future activity, plunged from 60.1 to 47.8.
That's the first time it has fallen below 50 since April 2009, when the
economy was still in recession.
Fewer new orders reflect growing concerns of businesses. In addition to
slower global growth and less spending by U.S. consumers, many worry that U.
S. lawmakers won't extend a package of tax cuts at the end of the year.
Bricklin Dwyer, an economist at BNP Paribas, said the uncertainty "has left
businesses unwilling to invest."
A gauge of production in the ISM's survey fell to its lowest level in more
than three years.
U.S. factories are also reporting less overseas demand. A measure of exports
dropped to 47.5, its lowest level since April 2009.
A gauge of employment edged down but remained at a healthy level of 56.6.
That suggests factories may still be adding jobs. Manufacturers have
reported job gains for eight straight months.
Overall hiring has slowed sharply this spring. Employers added an average of
only 73,000 jobs per month in April and May. That's much lower than the
average of 226,000 added in the first three months of this year. The
unemployment rate rose in May to 8.2 percent from 8.1 percent, the first
increase in a year.
Worries about slowing job growth are outweighing the benefits of lower gas
prices. A measure of consumer confidence fell in June for the fourth
straight month.
Slower job growth and falling confidence are weighing on consumers'
willingness to spend. Americans cut back on purchases of autos and other
long-lasting factory goods in May, the government said Friday.
There have been a few optimistic signs.
The housing market has steadily improved.
Construction spending rose 0.9 percent in May from April, the Commerce
Department said in a separate report Monday. It was the second straight
monthly increase, even though the level of spending still isn't healthy.
The increase was driven by a surge in residential construction. Home sales
are up from the same month last year. Mortgage rates are at the lowest
levels in history. And prices have begun to stabilize in most markets.
The economy could also get a boost from lower gas prices, which have tumbled
more than 60 cents per gallon since peaking in April. The result is that
consumers have more money to spend this summer on other goods, from autos
and furniture to electronics and vacations, that fuel economic growth. |
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