Philadelphia Fed: Pennsylvania, New Jersey, and Delaware See Huge Drop In Economic Activity

They don't say the region has fallen into contraction, or a new recession.

I don't see how that statement is untrue, though.

Manufacturing in the Philadelphia region shrank in June at the fastest pace in almost a year, showing the global economic slowdown is holding factories back.

The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 16.6 in June, the lowest level since August, from minus 5.8 the previous month. Economists forecast the gauge would improve to zero, the dividing line between growth and contraction....

Unexpectedly.

US manufacturing (nation wide, not regional) totters on the dividing line between expansion and contraction:

Another report today showed manufacturing in the U.S. grew at a slower pace. The Markit Economics index fell to 52.9 in June from 53.9, the London-based group said in its preliminary estimate today. A reading above 50 in the purchasing managers’ measure indicates expansion.

And that's especially bad, because manufacturing has been one of the only bright spots in this ongoing depression.

For the second straight month, weaker demand from Europe and large emerging markets such as China dented sales. Markit said U.S. manufacturers reported the second largest decline in new export orders since September 2009.

The index's new orders component fell to 54.1 from 54.6.

Manufacturing has been one of the strongest links in an otherwise frail U.S. economic recovery, but Markit said weaker overseas demand may be starting to slow hiring in the sector.

The employment component fell in June to 53.1, reflecting the weakest rate of hiring in eight months. It stood at 54.3 at the end of May.

An analyst quoted in that piece says that June hiring will "rebound," but weakly, and won't be greater than 150,000 (which is bad).

Anyone want to take a bet against me that it will be "unexpectedly" lower?

World stocks fell more than 1% on growth worries.

Worries?

Oil prices have fallen, too -- they fall when people realize they won't need as much energy, because there won't be as much economic activity.

Or, as the media calls it: The silver lining of a recession!

This Doom courtesy of @comradearthur.

posted by Ace at 03:29 PM

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