None of the six biggest manufacturing industries registered growth,”
ISM®’s Employment Index registered 43.4 percent in July, 5.9 percentage points lower than the June reading of 49.3 percent.The index recorded its lowest level since a reading of 42 percent in June 2020.
The struggles in the manufacturing sector continued to contrast with the health of the overall economy, which is experiencing expansionary conditions driven by the growth in the services sector. July marks the 20th month of contraction in the U.S. manufacturing sector over the past 21 months.
This pretty much matches my world view during the 50 hours of my week that I focus on this.
For me, there are a couple of data point differences for what I see. (If I were to respond)
Imports is an interesting category as there were a bunch of tariff/penalty related action which have really started to move the needle toward internal NA partner location benefits.
Prices are NOT increasing but are steadily eroding.
Inventory and customer inventories are small and still being optimized.
Companies have been making purchases from China because the tariffs in some cases are rising. This has taken some of the wind out of our sails. China’s GDP growth was very good because of this.
If companies are trying to front-run tariffs, why are inventories falling?
As we head into August, companies should start receiving stuff for the Christmas commercial explosion. Are the inventory numbers in the report seasonally adjusted, to filter out the Christmas inventory build?
If inventories are falling in Aug/Sep, then companies are clearly expecting a recession and a lower Christmas sales season. We need to wait and see the August and September numbers. Only a few things require July inventory to be available during the winter sales season.
Could also be just the opposite. Usually the bargains come when retailers “panic” and realize they have too much inventory. If they realize that sales will be okay, and they have low inventory, then prices will likely be higher than usual.
