Amid the best economy that has ever been, US manufacturing plunges deeper into recession

[Orangesapples 1,954]

https://www.cnn.com/2020/01/03/economy/december-manufacturing-downturn/index.html

 

America's manufacturing downturn isn't letting up. Factory activity contracted for the fifth consecutive month in December, registering a worse drop than expected.

The Institute of Supply Management's manufacturing purchasing managers' index logged its lowest level since June 2009 at 47.2, compared with the consensus forecast of 49. It stood at 48.1 in November. Any number below 50 denotes a contraction.

Uncertainties surrounding the US-China trade war weighed on the sector last year. And while Washington and Beijing stand to sign a preliminary trade deal on January 15, economic data from December was still deflated because of the spat.

"

Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the 'phase one' trade agreement between the US and China," said Timothy Fiore, chair of the ISM manufacturing business survey committee.

Last week, the Federal Reserve argued in a paper that import tariffs hurt US manufacturing. "A positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs," it said.

Even though the US economy is driven primarily by consumer spending, the on-going manufacturing slump is affecting GDP forecasts for the final quarter of 2019.

The New York Fed lowered its fourth quarter growth expectations to 1.1% from 1.2% following the ISM data. The Atlanta Fed still forecasts 2.3% growth between October and December.

While America's factories still struggled at the end of 2019, the sector is showing early signs of improvement globally. The JPMorgan (JPM) global manufacturing PMI stood at 50.1 in December, slightly below the prior month's number but still proving that the industry is expanding.

[Steeleballz 7,550]

   Manufacturing jobs as we remember them are not coming back. It's a bit like gas powered cars. They had their time, and they are going to be lingering on for a while. Might be a few decades, but the end is in sight. Many people remember the glory days, and want to bring that back without accepting that there is fundamentally no way for that to happen. There will be a lot of resistance to the concept of change, but ultimately manufacturing jobs, like the global oil supply, are just not going to exist. 

 

  My biggest issue with politicians that promise to bring coal jobs or manufacturing or anything else that we used to have, is they are just prolonging the inevitable. Offer people a way forward. The way back does not exist.

[Orangesapples 1,954]

2 minutes ago, Steeleballz said:

   Manufacturing jobs as we remember them are not coming back. It's a bit like gas powered cars. They had their time, and they are going to be lingering on for a while. Might be a few decades, but the end is in sight. Many people remember the glory days, and want to bring that back without accepting that there is fundamentally no way for that to happen. There will be a lot of resistance to the concept of change, but ultimately manufacturing jobs, like the global oil supply, are just not going to exist. 

 

  My biggest issue with politicians that promise to bring coal jobs or manufacturing or anything else that we used to have, is they are just prolonging the inevitable. Offer people a way forward. The way back does not exist.

I work in manufacturing and it's not just low skilled factory jobs that are being cut (most of them are outsourced to Mexico, China and India already anyway), it's across the board. Sales are down for whole industries. It's a pretty bleak picture and it's a ticking time bomb. 

[Steeleballz 7,550]

2 minutes ago, Orangesapples said:

I work in manufacturing and it's not just low skilled factory jobs that are being cut (most of them are outsourced to Mexico, China and India already anyway), it's across the board. Sales are down for whole industries. It's a pretty bleak picture and it's a ticking time bomb. 

 

   I agree with that. I think most economists saw that tariffs were ultimately going to have that effect. 

 

   I think the tariffs were driven by the desire by the current administration to strengthen US production and manufacturing. They were willing to sacrifice a few lambs to get the results they imagined. The big problem is when the premise was wrong in the first place. Most people know that you can't double down when you are wrong.  

[Burnt Reynolds 5,058]

"Manufacturing jobs aren't coming back"

 

 

They clearly are. I understand the wishful thinking for the US to fail because of the "orange man bad" problem, but reality thankfully tells a different story than CNN.

 

While manufacturing will never be anywhere like WW2 to Reagan, the last decade suggests it clearly is on the rise again, and Trump is successfully positioning the US to maintain a productive workforce in this regard. Even with technology and the transitioning investment re:opportunity costs inevitably result in a decline in the long run, manufacturing will never go away. There's significant value not just economically, but politically, in maintaining a manufacturing workforce. 

Edited February 11, 2020 by Burnt Reynolds

[Orangesapples 1,954]

2 minutes ago, Burnt Reynolds said:

"Manufacturing jobs aren't coming back"

 

 

They clearly are. I understand the wishful thinking for the US to fail because of the "orange man bad" problem, but reality thankfully tells a different story than CNN.

 

While manufacturing will never be anywhere like WW2 to Reagan, the last decade suggests it clearly is on the rise again, and Trump is successfully positioning the US to maintain a productive workforce in this regard. Even with technology and the transitioning investment re:opportunity costs inevitably result in a decline in the long run, manufacturing will never go away. There's significant value not just economically, but politically, in maintaining a manufacturing workforce. 

Supreme leader Trump great! 

 

Look, I work in manufacturing and I have access to a lot of data. Things are pretty bad. Employees are getting laid off left and right. I posted a CNN article because it's the most recent one but there's a lot of other information out there. The reasons for the recession are complex and cannot all be attributed to the orange buffoon but his trade wars are surely not helping. 

[Burnt Reynolds 5,058]

11 minutes ago, Orangesapples said:

Supreme leader Trump great! 

 

Look, I work in manufacturing and I have access to a lot of data. Things are pretty bad. Employees are getting laid off left and right. I posted a CNN article because it's the most recent one but there's a lot of other information out there. The reasons for the recession are complex and cannot all be attributed to the orange buffoon but his trade wars are surely not helping. 

Indeed he is, and will be re-elected as a result! Trump 2020/2024/infinity!

 

Companies in a market rise and fall with regularity. Segments likewise rise and fall. Low skill employees being laid off at a specific company isn't a sign of anything on a macro scale (rising numbers mean they're being redistributed elsewhere across the industry to more productive/better managed companies), so describing some amazing uncited data you have is utterly meaningless when you have employment numbers at record low and manufacturing jobs climbing consistently. It clearly isn't dying any time soon, despite the malicious wishes and narrative driving of some.

Edited February 11, 2020 by Burnt Reynolds

[Orangesapples 1,954]

4 minutes ago, Burnt Reynolds said:

Indeed he is, and will be re-elected as a result! Trump 2020/2024/infinity!

 

Companies in a market rise and fall with regularity. Segments likewise rise and fall. Low skill employees being laid off at a specific company isn't a sign of anything on a macro scale (rising numbers mean they're being redistributed elsewhere across the industry to more productive/better managed companies), so describing some amazing uncited data you have is utterly meaningless when you have employment numbers at record low and manufacturing jobs climbing consistently. It clearly isn't dying any time soon, despite the malicious wishes and narrative driving of some.

TDS? 

 

https://thehill.com/policy/finance/465273-survey-two-thirds-of-economists-say-manufacturing-is-in-recession

 

https://www.businessinsider.com/trump-trade-war-loss-of-manufacturing-jobs-contradicts-purpose-tariffs-2019-10

 

My data is that I see the layoffs (highly skilled people, too) and I also know other companies (customers and suppliers) are laying people off. Plus, the numbers are down in many industries I work with. It's pretty depressing, trust me. 

 

 

Edited February 11, 2020 by Orangesapples

[Steeleballz 7,550]

23 minutes ago, Burnt Reynolds said:

"Manufacturing jobs aren't coming back"

 

 

They clearly are. I understand the wishful thinking for the US to fail because of the "orange man bad" problem, but reality thankfully tells a different story than CNN.

 

While manufacturing will never be anywhere like WW2 to Reagan, the last decade suggests it clearly is on the rise again, and Trump is successfully positioning the US to maintain a productive workforce in this regard. Even with technology and the transitioning investment re:opportunity costs inevitably result in a decline in the long run, manufacturing will never go away. There's significant value not just economically, but politically, in maintaining a manufacturing workforce. 

 

     You misquoted me to frame your argument. There is a reason you did that. You actually agreed with what I said, it's not going to be the way people remembered it. That was just a failed promise to an electorate that wanted to believe it.

 

     We can certainly see a spike in transient low paid manufacturing jobs during a boom economy. Just as certainly those employees will be kicked to the curb during the next recession. Ross Perot warned that the manufacturing industry was stagnant 25 years ago. Today we have the exact same number of manufacturing jobs as we did in 1992. Relative to overall population, jobs should have been added just to keep up with population growth. A thriving economy has done little but mitigate the speed that the manufacturing industry is shrinking. The president's tariffs has not helped that. It hurts growth in the short run, and there is no capacity left to absorb the damage when the economy turns south. That's just a matter of when, not if. 

[Orangesapples 1,954]

Here is some scary talk for those suffering from excessive optimism:

 

 

[Burnt Reynolds 5,058]

Scary talk for those suffering from excessive optimism (circa 2016):

 

https://www.investors.com/politics/columnists/and-the-hits-just-kept-coming-the-greatest-false-predictions-of-2017/

Quote

 

"Donald Trump's first gift to the world will be another financial crisis." Headline in the U.K. Independent. "(He) gives every impression that he will soon be hustling America — and possibly the entire world — in the direction of another catastrophic financial crisis." Same article.

"I have no stocks. I advise people not to invest in the stock market, not now. Way too dangerous." Film maker Michael Moore, August, 2017.

"It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?  A first-pass answer is never… So we are very probably looking at a global recession, with no end in sight." Paul Krugman of the New York Times the day after the election.

"Trump's domestic policies would lead to recession." Former GOP presidential candidate Mitt Romney, March 2016.

"If Trump wins we should expect a big markdown in expected future earnings for a wide range of stocks — and a likely crash in the broader market (if Trump becomes president)." Eric Zitzewitz, former chief economist at the IMF, November 2016.

"Under Trump, I would expect a protracted recession to begin within 18 months. The damage would be felt far beyond the United States."  Former Clinton and Obama chief economist Larry Summers, June 2016.

"Trump would likely cause the stock market to crash and plunge the world into recession." Simon Johnson, MIT economics professor, in The New York Times, November 2016.

"Citigroup: A Trump Victory in November Could Cause a Global Recession",  Bloomberg Financial News headline, August 2016.

 

 

And lots more in the link!

 

Hint: It's not working.

[Orangesapples 1,954]

1 minute ago, Burnt Reynolds said:

Scary talk for those suffering from excessive optimism (circa 2016):

 

https://www.investors.com/politics/columnists/and-the-hits-just-kept-coming-the-greatest-false-predictions-of-2017/

 

And lots more in the link!

 

Hint: It's not working.

A recession is coming, a manufacturing recession is already here, the question is not if but when. 

[Burnt Reynolds 5,058]

3 minutes ago, Orangesapples said:

A recession is coming, a manufacturing recession is already here, the question is not if but when. 

2016: A recession is coming

2017: A recession is coming

2018: A recession is coming

2019: A recession is coming

2020: A recession is coming

 

 

[Orangesapples 1,954]

6 minutes ago, Burnt Reynolds said:

2016: A recession is coming

2017: A recession is coming

2018: A recession is coming

2019: A recession is coming

2020: A recession is coming

 

 

Did you not read that a manufacturing recession is already here? 

 

And yes, some people were ringing the alarm on the 2008 recession for years and eventually they were right. 

 

I don't want a recession because I'm going to suffer, too. But that's just the reality. 

[Burnt Reynolds 5,058]

1 minute ago, Orangesapples said:

Did you not read that a manufacturing recession is already here? 

 

And yes, some people were ringing the alarm on the 2008 recession for years and eventually they were right. 

 

I don't want a recession because I'm going to suffer, too. But that's just the reality. 

It clearly isn't. Just because your job might be suffering doesn't mean everyone else's in your industry is. The fallacious reasoning here doesn't need much expansion.