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| Economy |
| Indicators suggest rebound in US faltering |
| 2010-07-02 |
| Fears that the US recovery is losing steam were reinforced on Thursday as a stream of new data on the health of the economy, from manufacturing to housing to the labour market, came in below expectations. Growth in the manufacturing sector appears to be slowing and one indicator showed the first possible signs of damage to US exporters from the European sovereign debt crisis. The Institute for Supply ManagementÂ’s overall manufacturing index fell from 59.7 in May to 56.2 in June, a much larger drop than predicted by economists, who were looking for a reading of 59. Although any reading above 50 indicates an expansion in manufacturing activity, this is now the second consecutive monthly drop. Some components of the survey were particularly discouraging, with the employment and new orders gauges dropping. Meanwhile, new export orders, which had been consistently above 60 in recent months, fell back to 56, which could be an early sign that the drop in the value of the euro and weaker European demand will hurt US producers. No solace for observers of the US economy came from data on the troubled housing market. The National Association of Realtors reported that pending home sales, a measure of activity in home purchases that have been agreed but not completed, tumbled by 30 per cent in May, much worse than the 12.5 per cent drop predicted by economists. A decline was widely predicted but the extent has brought renewed fears of a housing double-dip. |
| Posted by:lotp |
| #6 What recovery? "a stream of new data on the health of the economy, from manufacturing to housing to the labour market, came in below expectations" No doubt, as the Professor says, "unexpectedly." >:-( |
| Posted by: Barbara Skolaut 2010-07-02 19:27 |
| #5 "Recovery Summer!", huh, thanks Sheriff Joe Biden, you stoopid jerk |
| Posted by: Frank G 2010-07-02 16:13 |
| #4 crap food, alcohol, cigarettes, pr0n, gaming/gambling, and shiny new toys Hot damn! Whiskey, sexy |
| Posted by: Shipman 2010-07-02 15:11 |
| #3 I agree the economy is resetting to a lower level. It will take far longer than a year due to the extent of the changes. Consumer used to be 70% of the economy, but if the consumers save a prudent amount of what income they have, there will be very little available for discretionary spending, and much of the economy based on that will simply disappear. A great many of those currently unemployed will not be able to find even minimum wage jobs. |
| Posted by: Anguper Hupomosing9418 2010-07-02 13:12 |
| #2 banks, who are now sitting on massive reserves and have no intention of increasing lending. That's because alot of these banks are really bankrupt. They need the money to write off their bad debts a little bit at a time. Maybe no one will notice. |
| Posted by: Frozen Al 2010-07-02 12:41 |
| #1 Of course it's "faltering," because the recovery was nothing more than another liquidity-fueled mirage. Our government has transferred trillions from savers, who earn next to zip on their accounts, to the banks, who are now sitting on massive reserves and have no intention of increasing lending. In addition, millions of households that used to have negative worth have finally started to move into saving mode. Banks aren't lending. Consumers aren't spending-- except on their addictions such as crap food, alcohol, cigarettes, pr0n, gaming/gambling, and shiny new toys made in China by Apple and their ilk. When an economy that was based primarily on millions of households buying $hit they didn't need with money they didn't have shifts to one based on bread and circuses, you have to take a lasting hit. The economy is simply re-setting at a lower level. This will take at least another year. When US households finally have, in aggregate, a 9-month cushion against loss of income due to unemployment or reduced pay, THEN we will see people spending again on more than candy, nicotine and iPhones. |
| Posted by: lex 2010-07-02 09:36 |