Category Archives: US slowdown

4/4/15: Another Sign of US Growth Slowdown Risks: ISM


A very interesting chart via Bloomberg's @M_McDonough showing the growing weakness in US Manufacturing:



Local max at November-December 2014 is now being eroded, although ISM is still reading reasonably above 50.

This is just another confirmation of some (early) signs of the US economy shifting toward 'mature expansion' stage of the cycle. Given that all of this is still based on two exogenous factors: the hang-over of lower capex costs and low energy costs, the signal is not good - slowing economy into the Fed rising reversal that might coincide with firming of oil prices in H2 2015 will be a tricky risk to manage.

Note some other data points relating to the slowdown in growth signals: http://trueeconomics.blogspot.ie/2015/04/2415-oh-someone-spotted-us-growth.html.

2/4/15: Oh… someone spotted US growth slowdown risk…


Given that even the Irish Stuffbrokers are starting to wake up to the ongoing slowdown in the US economic growth (yet to smell the traces of the global slowdown next), here is a chart worth contemplating:
Explaining the above, the authors, Markit say: the "Business Outlook Survey, which looks at expectations for the year ahead across 650 US private sector companies, highlighted that business sentiment remained positive in February, but the degree of optimism moderated to a post-crisis low."

More specifically: "At +24 percent, down from +31 percent in October 2014, the net balance of firms expecting a rise in business activity over the year ahead was the lowest since the survey began in late-2009. Weaker business sentiment was recorded in both manufacturing (+32 percent in February, down from +42 percent last October) and services (+22 percent in February, down from +29 percent)."

And here is the comparative to other major advanced economies:


Oh, and the US weakness is compounded (and compounds) broader expected global weakness: http://trueeconomics.blogspot.ie/2015/04/2415-bric-business-outlook-12-months.html and current ongoing slowdown: http://trueeconomics.blogspot.ie/2015/04/2415-bric-manufacturing-pmi-march-marks.html. Even though the Global PMI for Manufacturing sector came out with basically no change in March (51.8) compared to February (51.9), overall growth has been trending well below immediate post-crisis recovery years and pre-crisis period:


Just at the time when Irish official forecasters are revving up their numbers for 2015-2016, because being myopic is what we do best...