U.S. Manufacturing Expands for a Fourth Month as Factories Propel Recovery

[Purveyor]

Source: Bloomberg



By Bob Willis

Dec. 1 (Bloomberg) -- Manufacturing in the U.S. expanded in November for a fourth consecutive month, putting factories at the forefront of the recovery.

The Institute for Supply Management’s manufacturing index fell to 53.6, lower than forecast, from October’s three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.

Growing exports and lean inventories may keep manufacturing growing into 2010, helping drive the economic expansion. Factory production, which rose at the fastest pace in a quarter century in the three months through September, will probably climb at a slower pace in coming months as mounting unemployment restrains American consumers.

Manufacturing is “one of the strongest sectors of the economy,” said Chris Low, chief economist at FTN Financial in New York. “Inventories remain very slim, that’s one of the most positive aspects going forward.”

The figure compared with economists’ median forecast for a decrease to 55, according to 76 projections in a Bloomberg News survey. Estimates ranged from 53.5 to 57. Fifty is the dividing line between expansion and contraction. Manufacturing accounts for about 12 percent of the economy.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aVQL.BAB0eYo&pos=2

[leveymg]

1. Mistitled. Should read: "Weaker than Expected Recovery - Manufacturing at Low End of Estimates"

Still a sow's ear.

[Zynx]

15. If you choose to look into the report you will see that new orders continue to improve.

The overall ISM index was dragged down by a bigger drop in inventories. Frankly, a rise in new orders while inventories are dropping is a pretty damn good sign. That means that production will have to kick into gear in a big way.

[leveymg]

21. Still the lowest end of the range, no matter how you want to spin it - an economic sow's ear.

Hard to get real excited about this "recovery."

[dmallind]

2. So - housing sales up, manufacturing up, markets up

all good indicators, and yet still I guarantee there will be the "where are the jobs" cry from those who have forgotten that unemployment generally peaks about 9 months after a recession ends. We'll start seeing improvement in jobs (no not everything rosy, but improvement) in the middle to end of next year, but there will still be the kneejerk reverse-Cassandras who claim doom is coming.

[caseymoz]

8. Peaks in 9 months? I'd prefer to see just stop hemorrhaging.

Really, I don't see anything happening here except the rich have fixed the economy enough for themselves. Meanwhile, nothing has been fixed in the derivative markets or the financial markets to give this economy sustained growth. The commercial real estate market is imploding, worldwide finance is facing the same sort of panic that took place after Lehman, the housing meltdown continues with 14 percent of owners in foreclosure, credit card companies are squeezing consumers, which is killing the retail sector. This economy is being weighed down, and it's in grave danger. How is there going to be rising employment under those conditions? Moreover, how is there going to be a recovery? How steady could it be with all of landmines? We are never going to attain the prosperity we had in the 90s in our lifetime at least.

That's not a glass half-full scenario. This is a glass with a huge leak.

[Juche]

9. Do you think there will be jobs in this recovery though?

My understanding is that millions of people have had their hours cut. Before I lost my job they tried that first (I was working 36 & 48 hours on alternating weeks, then they cut me to 30 & 40 on alternating weeks. Then they let me and someone else go and put the other 2 workers on 20 hour weeks). The equivalent of 3-4 million jobs have been lost if you look at hours that have been cut. It seems employers will just end up increasing hours rather than hiring new people.

So the U6 is going to go down in the recovery (because underemployment will decline) but I don't think the U3 will go down. I have heard unemployment via the U3 will stay near 10% for the next 2 years due to low hiring of new people and converting part timers to full timers during the recovery.

We are lucky in some ways, I remember when this first started economists like Roubini were predicting something like a 30% chance of a depression. Instead we just had a severe recession.

However I don't think employment will pick up to healthy levels for 5 years or so. We've lost about 7 million jobs, and hour cuts have eliminated the equivalent of 3-4 million more jobs. Plus you need a certain number of jobs a month (150k, something like that) for all the new applicants coming into the market just to stabilize unemployment. Add that number in because from 2008 until the present we have lost jobs rather than gained them. I don't know if that number is added into the U3 or U6, but that is the equivalent of 3 million jobs (from 2008-2009) we needed to stabilize unemployment that we didn't get. If that number is added (not sure if it already is, but I doubt it), that comes to 13 million net lost jobs. 3 million we should have created and didn't, 3 million (equivalent) lost due to hour cuts and 7 million jobs lost.




Its not going to be over quickly.

[Kolesar]

11. Automation, information technology and "lean" have taken away a lot of jobs for good

People entering the job market are going to have it rough for a long time. I couldn't find summer work in high school or college and hiring was cancelled at many companies when I got my degree during the Reagan recession.

[dmallind]

13. And all of them also allow us to compete with low cost countries

All the things you list allow US companies to produce goods at a lower cost (Lean never has been about cutting jobs, and while automation and IT can be, they also create more jobs too - somebody makes that machinery and writes that code). If you cannot be in even VAGUELY the same ballpark as an LCC competitor for a commodity type product, to whom do you expect to sell your goods? Chinese producers are decades behind us in these areas, and it helps level the playing field in a world marketplace. The company where I work for example gained production back from our sister company in China exactly because we could produce more efficiently. Our labor costs of course are much higher, but add back in the logistics savings as we sell mostly to American customers, and we won in a fair fight looking at total costs.

[caseymoz]

17. Your relaxed attitude about this is somewhat influenced by your own secure position.

And I've been there myself, and have had the same attitude myself. But what do you have to say about the points I brought up? The booms that we've had since Reagan have mostly been from bubbles. That works only as long as the patsies have money, and don't become jaded. I can't see any sector of the public now being anywhere near as willing or able to put their money in another pyramid scheme.

How long do you think the Chinese will be decades behind us if we're sending them barges of money?

What do yo mean that lean has never been about cutting jobs? "Workers" are cited as the main cost to any industry, how to get it for cheaper and how to cut out workers and still make money has been a problem across all industries. Automation and IT generates jobs, for a decade maybe, and the purpose of those has been "more efficiency." Mostly, to eliminate jobs (also, though, it does the jobs far better than human labor can).

I don't see the structure of this economy as being sustainable, at all, and I think we're moving into a time of great instability. When it's over, I have no hint about what the system will look like.

[dmallind]

18. which i just started after 10months unemployment...

...sorry but I do not let my personal situation affect my reasoning. I draw conclusions from data, not from my own anecdotal example.

Of course bubbles will exist - but they are a side effect of growth and ignorance. Bubbles exist because people think growth is linear and uninterrupted. In reality it's more of a punctuated equilibrium to steal a biology term. The "dot com" bubble burst, but we still made tremendous gains and got tremendous growth from the internet revolution. People just thought those gains would keep on growing. They didn't of course, but we kept a good part of that increaed productivity. It's like starting a bodybuilding program and assuming those major musculature changes you see in the first six months will continue in a linear manner. Instead the rate of change decreases, but you still keep the muscle growth you had. Same for the real estate bubble. People who overbought in the last 3 years or so have seen some pain, but your house is still worth more than it was in 1985 regardless of where you live. The DOW did not break 30K like the stock bubble folks thought, but it has no chance at all of going back to pre-Clinton levels either - we still kept much of the gains even when the bubble burst. The pattern is consistent and most certainly WILL happen again. There will be a nanotechnology bubble, and several alternative energy bubbles within my normal life expectancy. There will be more sharp corrections, but each time we will keep most of teh core gains from these bubbles.

Lean has nothing at all do to do with headcount. Unnecessary work is one of the wastes of course, but trust me no company who has really gotten the idea behind Lean even a little would ever use that freed up time on anything else but looking for more gains from reduced waste. Since Lean relies on front-line input to identify those wastes, getting rid of them when they have done so is contrary to the entire point. I live this stuff and have for years and have NEVER seen anybody laid off due to Lean efforts. It would be suicidal.

The Chinese will remain behind us for quite some time. They are only just beginning to implement any kind of real improvement programs and it remains easy for them to simply throw labor at any process rather than improve it. By the time that paradigm changes it will be because China has a substantial middle class and a consumer economy, by which time they will be on an equal cost level as ourselves and no longer be the low cost provider.

The basic structure of the economy will continue for the foreseeable future IMO. We will still be consumer led. We will still react emotionally and stupidly to economic changes and opportunities, so we will still see bubbles grow and burst. We will of course have some periods of recession as we have now, but the general direction will continue to be positive over the long term. The best response is not to jump on bandwagons too quickly and dramatically when they are generating lots of positive buzz, but not to jump off them too quickly when the doom and gloomers predict the final fall either.

[caseymoz]

32. The data you look at is only as good as the assumptions you add to it.

And those assumptions are drawn from other things and for other reasons, and you carry them around without knowing it. I am curious about the particulars of these statistics. Just which sectors of manufacturing are doing well? We have to support armies in Afghanistan and Iraq, so that's going to skew manufacturing data upwards. Those weapons and supplies are bought with government money, supplied by the Chinese, Japanese, or the taxpayers. Who is producing the rest of these goods and who are their buyers? Real estate prices are going up, so where is the credit for it coming from, and more than that, is it really from people buying houses, or is it from speculators buying houses in anticipation that the market has bottomed out?

"Lean has nothing at all do to do with headcount. Unnecessary work is one of the wastes of course, but trust me no company who has really gotten the idea behind Lean even a little would ever use that freed up time on anything else but looking for more gains from reduced waste."

I'm totally mystified by this seemingly circular statement. The companies would definitely use it to give the saved money to their stockholders, who really have no interest now in gaining anything but winnings for that quarter, and who then easily bet their winnings on somebody else, along with boards of directors who sit on boards of several companies, whose commitments are questionable, and whose re-elections are usually unopposed. And the CEO who is generally guaranteed millions once he is hired. These are the people running the company, and generally, as far as their interests are concerned, the company is gravy. They can live in retirement off the assets they already have.

What I have seen in every bubble is that people don't just think growth is linear, they are deliberately sold the idea. Each and every time it happens, the myth is propagated that the problems of inherent to the markets have been solved by some kind of new widget. Most prominent to me was when it "happened" because of the Internet. People thought that technology and innovation had solved the problem of market instability.

A sad fact you haven't perceived is: this economy now works like Vegas, and ordinary people lose their shirts in it because given the proper marketing approach, they can be persuaded to gamble, and as long as it is not called gambling. The ones most susceptible to this are the ones who are educationally deficient. They don't understand the math.

I am curious as to why you presume that we can't "bottom out" to pre-Clinton levels, or that there is, really, a bottom. I don't think that's at all pessimistic that I say that, it is simply a reality. Whole nations can collapse through refusal or inability to deal with their problems. I don't think bubbles are either inevitable nor or they perpetual, and the economic dislocation they case can certainly crack a nation.

I'm glad you got hired. So, does it pay as well as your last job did?

[dmallind]

34. Delete - dupe

[dmallind]

35. Do you know much about Lean?

I don't mean to be snarky here qand I mean that sincerely as a question not an assumption but it seems you're not actually talking about Lean, but about reducing staff to a minimum regardless of process improvements. People sometimes call that "running lean" but it has nothing to do with the big L continuous improvement methodology. Not a single Lean guru would sell it that way or implement it for those purposes. Companies slash jobs, but that's nothing to do with removing wastes using Lean techniques.

What you think I failed to perceive, I actually stated. Bubbles are both inflated and burst when the ill-educated masses try to jump on the bandwagon. Sure unscrupulous individuals egg them on - but then unscrupulous people are always trying to take advantage of others. The Hare Krishna folks tried to convert me. I didn't go for it. The economy is like Vegas only inasmuch as Vegas contains some games where the uninformed sunbsidize the informed - such as idiots who think their chances of winning a blackjack hand vary depending on how many they have won or lost in a row previously. It is not the Vegas of random slots or roulette. Market darlings come and go, but never without warning (absent outright fraud).

There is nothing magical that says we "cannot" EVER return to pre-Clinton levels. I just don't see any real risk of that happening. There have been real substantive gains made in technology for one. The much demonized globalization for another. Frankly I think the only things that COULD utterly destroy the market to those levels would be some things advocated here such as excessive tariffs and abandoning free trade. Bubbles are inevitable as long as people remain uninformed and emotional. I'll give you one prediction on the downside to make the point. Gold is almost certainly in a bubble now. Gold fans point to it as "real" value and say dollars are only worth something because the government says so. Gold however is a decent conductor and pretty to look at. Neither of those things is real value in the event of a total collapse in the economy. Gold is only valuable until people get that through their heads. The only things that are really rather than nominally valuable are raw materials and the ability to convert them into things. Gold is way down the list on useful raw materials.

BTW thanks and pretty much yes. Slightly lower in dollars but in a slightly cheaper area for housing so it's a wash. It's certainly tough out there of course in the job market and I'm not trying to say otherwise.

[caseymoz]

42. Well, I'm convinced not a single business guru would sell it that way.

Doing so might keep the middle managers alert to what is afoot. That doesn't mean that it's in any way true that the end purpose isn't to either cut workers or reduce hiring. It works very well as long as somebody else is hiring more and maintaining wages so that there is ultimately a market that buys your products. What happens when everyone adopts it and implements it? Layoffs and no hiring. It's similar to how commodity prices crashed in 1927 after widespread mechanization in farming. Did it ever eventually create more jobs in farming? No. The farming industry in the US was followed by several more huge shake-outs. Those jobs never came back.

Now, I know the stated purpose is to create better value for the customer, but value is only defined as what they can convince a customer to buy, and I'll add, what that customer will recommend to other potential customers. Now, there are definitely good sides to better value, but capitalism saved itself by morphing into consumerism. This separated the interest of a person as a worker from the person as a consumer. With the results that most people despise their jobs, get treated like shit on the job, but as consumers they are kings. Now, this separation of interests has limits, and they are tried the most when the most people are unemployed. It might also happen if energy shortages and environmental damage destabilize the current system. I've always wondered how would the shortages actually look in macro-economic terms? You can't tell by current prices, because that also describes how fast we're extracting resources, not how close we are to exhausting them.

I do not actually know what the solutions are, but I think it's something far more basic than tariffs and free trade. I don't think any of this is sustainable, and I think I'll see this worldwide economic system come apart in my lifetime. I'm certain I won't see what replaces it.

[Kolesar]

44. Good points...eom

[dmallind]

12. eventually yes.

I'm not going Pangloss here. I think jobs will recover slowly and painfully, but I think they will start that recover next year sure. Inventories are falling rapidly, and the weak dollar has already started speeding up exports (we remain the third largest manufacturer in the world, and a leading exporter even with this recession - we just import far more). We are still a world leader in many industries including some emerging ones. As demand increases eventually production and service must increase to meet them, and somebody needs to be employed to do that. There are literally trillions of dollars out there being held both by individuals and banks - and dollars are only worth what you eventually buy with them. Chinese consumerism is increasing greatly, and that will benefit American producers too not just Chinese ones (GM and Ford already have seen major gains in that market). Contrary to much of the polemics on DU, people who have a choice generally want stuff, and some of that stuff will be made here.

[Juche]

39. I think manufacturing will pick up in the US, but I don't see jobs coming back soon

The reason is that I think employers will take those 3 million jobs that were 'lost' by cutting people's hours and put those people at full time first. So the U6 will go down, but the U3 will probably be at 10%+ for a while.

On another note, I think you're the only other person I've really met who realizes China's zenith as manufacturing capital of the world is ending. China is no longer as cost competitive as they were in the 1990s.


The Yuan is going up in value (while the dollar goes down)

Chinese wages are going up due to labor shortages. Birtually every able bodied young person willing to leave the villages to work in the cities has already, and the labor force is now made up of people born during the 1 child policy. So wages grow 10-25% a year (doubling every 3-7 years) vs doubling every 20 years in the US.

China is taking the environment, labor standards and quality control more seriously due to internal and external demands. So that will increase the cost of manufacturing.

Shipping costs went up dramatically due to higher oil prices in 2008, and will go back up soon as oil prices go back up.

Raw material costs are going up, so even if labor costs are lower they will make up a smaller % of the overall product because of higher raw materials.


Add in other costs like higher inventory and management costs and China really isn't saving much. I remember a story about a factory owner who manufactures curling irons. He said he only saves about 3% by making them in China. Even that 3% will disappear within a few years.

Some people have said more manufacturing will go to Mexico which is fine and all, but Mexico has 1/10 the population of China. So it can't 'replace' China anymore than Vietnam can.

On the bright side, all the outsourcing hopefully helped create a chinese middle class who can increase their consumption. However I think China needs better social safety nets to really use that. They have no pension or healthcare plan for the elderly like the US does. And I think (not sure) things like that are why Chinese workers save 25%+ of their incomes.


On another note, China recently cornered the market on rare earth metals (using savings while other nations and companies were desperate for cash in the recession). And they are going to use that leverage to try to corner the world market on renewable energy and consumer electronics manufacturing by limiting exports to the rest of the world.

http://www.theaustralian.com.au/business/news/china-builds-rare-earth-metal-monopoly/story-e6frg90f-1111119076188

The Chinese deserve to be the next superpower. They make cheap plastic crap, we send them money for it and they use that money to corner the rare earth metals market to corner the market on 21st century technology manufacturing.

[SkyDaddy7]

14. I totally agree...

Americans for the most part have no freaking clue how close we came to the edge of a complete economic collapse! And those who do quickly forget! I know this will get me beat down with evil comments but Obama's economic team has done a very good job so far! Even Geithner & Summers who both admitted they were dead wrong for supporting some of the deregulation in the past have done a good job in my opinion. I actually like Timmy! Plus, this might even get me kicked off DU but I support Obama's decision to keep Ben Bernanke as Fed Chairman. I like Capitalism! I also know we need new regulations that are up to date with a 21st Century Economy.

I do hate the fact Goldman Sachs has their tentacles in everything and the fact the banks got bailed out. But it is what it is and unless people wanted to do away with Capitalism & weather a complete economic collapse far worse than what we are going through now then there really was no other option. There is no economic recovery without banks.

I am still waiting to see if Congress will pass Geithner's proposed new financial regulations...The GOP says Geithner's proposed regulations is just more government take over so I assume the blue dogs will agree...And who knows how many other Dems in Congress will be against tougher regs considering the money Wall Street pours into buying votes. Passing these new proposals will probably be harder than health care reform!

[girl gone mad]

25. Minimal improvement. Double dip recession on tap.

Housing is propped up by government giveaways amounting to in excess of $40,000 per additional buyer. New home sales are weak, and new home sales, not existing home sales, are what drive job creation. Shifting more renters to buying homes will lead to further deflationary pressure on rents and probably cause more commercial defaults. Housing prices are still forecast to decline an average 11% over the next year, while many purchasers used the tax credit as a down payment. I would expect a significant number of these buyers to end up under water and possibly in foreclosure. Commercial real estate is an ongoing crisis. The problem bank list is surging. Despite throwing trillions of dollars at the banks, solvency remains an issue. Stock fundamentals are very poor. It looks increasingly like Dubai is not going to be bailed out, which could pose systemic risk. We are still mired in two expensive wars. We've got double digit unemployment and even with a return to unprecedented GDP growth, it would take a decade to get back to full employment.

Improvement in certain indicators is good, but it should always be put into context. Never mistake activity for achievement. We have a lot more activity in the markets, but we've achieved very little in the way of a sustainable recovery.

[dmallind]

31. possibly - but how does a W end again?

I personally doubt we are in for a significant double dip. There will always be variation and no recovery is ever consistently linear without pause, and this one will be painfully slow regardless. I could be wrong of course, but even if I am a double dip will simply give us a loop for another year or two before the recovery continues. The government giveaways are $6500 BTW and were never anything close to $40K. Existing home sales are still a good thing as the simple act of moving increases demand for fixing up things you don't like or buying furniture - so it still drives economic benefits. Buyers now are less likely to be under water soon as banks are far more stringent on lending criteria than they were (how much gnashing of teeth has occurred on DU about an inability to get loans?). The new problem banks are all small potatoes and many of teh big boys have already repayed part of their TARP funds. By all means we are nowhere near out of the woods and things are far from rosy right now, but the constant doomers cannot deny we are getting some good news at last.

[girl gone mad]

36. Who says it will be a W. Roubini and others say L, U at best.

And you are incorrect about the tax credit. Most people who bought homes would have bought w/out the credit.

I'll quote Calculated Risk's http://www.calculatedriskblog.com/2009/09/houses-and-autos-cost-of-tax-credit-per.html">excellent analysis here.

The numbers are much worse for the first-time home buyer tax credit. The NAR reported this morning:

NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.

I believe the NAR underestimates first-time home buyers, especially considering the definition for the tax credit is anyone who hasn't owned a home in three years - not really a "first-time" buyer. I also think the NAR is overestimating the number of additional buyers.

But using their numbers ...

With 1.9 million first-time buyers, the total cost of the tax credit will be $15.2 billion. Divide $15.2 billion by 350 thousand, and the program cost $43.4 thousand per additional buyer. The actual number could be much higher if there were fewer additional first-time buyers than the NAR's estimate - or if the overall cost is higher (more buyers claiming tax credit).

This is the actual cost per additional home sold. And since buyer interest will fade (like with the Clunkers program), the cost per additional house will increase sharply if the program is extended.

So we spent over $40K to lure in each extra buyer. Since then, the picture has only gotten worse. The most recent estimate I've read shows we are now spending over $100K per additional buyer. That is one expensive stimulus.

Also, banks have not been stringent when it comes to allowing marginal buyers to use the credit as a down payment. Again, from http://www.calculatedriskblog.com/2009/10/existing-home-sales-more-activity.html">Calculated Risk:

Yun also appears to be suggesting that the first-time home buyer tax credit is providing a "supply of qualified buyers". This is bubble type thinking. Did all the exotic loans during the housing bubble provide a "supply of qualified buyers"? Those buyers qualified for the loans, but they were not really ready for homeownership.

The same is true for buyers today obtaining FHA insured loans and using the $8,000 tax credit as their downpayment. Imagine a $200,000 purchase with no money down (except the tax credit). What happens in three or four years when the homeowner wants to sell? The transaction costs will be around $15,000 (about 7.5%) if they sell for the same price.

So a homeowner, who has been unable to save a down payment so far, will be expected to make a $15,000 down payment in arrears? I don't think so.

Oh wait. Haven't prices fallen significantly? Shouldn't prices just go up from here? Yun says we are returning "to a period of normal, steady price growth". So the homeowner can use their appreciation to pay the transaction costs? That is more bubble type thinking. Prices may go up. Prices may fall further. Loans should not be predicated on asset prices increasing.

“The next mistake will be a new way to make a loan that will not be repaid.”
William Seidman, "Full Faith and Credit", 1993.

Allowing buyers to use the first-time home buyer tax credit as a downpayment is "the next mistake".

As for those TARP repayments, let's be honest about where the repayment funds came from. I hate it when the apologists pretend that TARP was the only bailout, as if none of the other $$Trillion++ Fed giveaways happened. These banks are still playing the same dangerous games, with taxpayers now on the hook for up to $23.7 Trillion with a T.

http://cr4re.com/PBLNov2709.html">552 small potatoes adds up to a pretty big potato salad, don't you think?

[dmallind]

38. the person I responed to said double dip

A double dip is a W.

What we "spent" is not the same as a "giveaway". Your initial point implied that the $40K went to the homebuyer. I question too whether they expenditure is accurate. What was budgeted is not always what is spent. People always throw out the $700B Tarp fund. In realty much less than that was actually spent. If it is accurate, it is a sign of inefficient administration rather than failed policy.

[girl gone mad]

41. Roubini says double dip, L shaped recession.

Like a W, with a flat line instead of an upward slope at the end.

My initial point was accurate. We spent over $40K per additional buyer. We are now spending over $100K per additional buyer. It is a poorly crafted stimulus that the vast majority of economists oppose, for a multitude of reasons. It is true that all TARP funds have not been spent, but that is in large part because the Fed found other ways to funnel money to the banks, with much less oversight. I believe all $700B will eventually be used. AS of October, we were showing a net $100B loss on the funds we had loaned. The situation may have improved slightly since then, but Barofsky has made it clear that we will end up losing tens of billions on that bailout. When you add up talf, tlgp, ppip and the various other backstops and trash for cash programs, we will doubtless have socialized hundreds of billions more in losses to keep the private profiteers in business.

[FarLeftFist]

3. Manufacturing accounts for 12% of the economy....

And HC accounts for 16% ? WTF!?

[roody]

4. Land mines and armaments. Looking up!

[Dappleganger]

5. Where are the jobs?

Dh is in manufacturing and the only thing he's been able to find since the beginning of the year is contract work at 70 percent of previous pay with NO benefits. We've not seen any positive movement since February.

[valerief]

6. What countries perform US manufacturing? Surely not in the US. nt

[Zynx]

16. U.S. industrial production is still quite high.

It's just small in proportion to the economy.

[dmallind]

19. We are the world's biggest manufacturer .still

We are also the 3rd biggest exporter

[pampango]

23. In 2007 the US was still the biggest manufacturer. Have we slipped to third since then? n/t

[dmallind]

26. Nah - my brainfart - conflated exports and manuifacturing - corrected now

We are the world's leading manufacturer and the world's third biggest exporter. I initially misremembered and had it backwards.

[girl gone mad]

28. Only if you count finished goods which were mostly assembled elsewhere..

which is kind of a scam.

[pampango]

30. That's the same with manufacturing everywhere. Ipods are made (assembled) in China but only 5 cents

of Chinese stuff goes into each one. 99% of the materials and sub-assemblies come from other countries. It still counts towards the Chinese manufacturing total. :)

[caseymoz]

7. Relax everyone. The rich are still getting richer.

It's only 95 percent of us who are in the shrinking economy-- for now. All you have to do is get into that 95 percentile, then you're middle class.

I would like to find out what is being manufactured and where and to who is it being sold.

[dmallind]

20. Yeah - a bunch of purchasing managers are the Rockefellers

This is a measure of business demand and production.

[caseymoz]

33. It might be a measure of business demand and production, but who is making money on it?

If we are losing jobs, then most of the economy is still shrinking. I know that some manufacturers are doing well because of the Iraq and Afghan wars, but it's taxpayer money paying for that. Besides that, is this manufacturing for bigger yachts, bigger golf courses overseas, for Dubai's building projects? If it's the latter, I think we could expect a slump very soon.

Okay, so manufacturing is going on, where is the money from this being distributed? Who are the customers? And what sectors of manufacturing are doing well?

Your sarcasm because misses the point so badly. I already know a bunch of purchasing managers aren't the new Rockefellers, but some Rockefeller probably owns stock in their business, or owns a derivative related to it. And there is where they collect the money.

Ever since Reagan, we've accepted that unemployment would be the lagging indicator. That's almost the definition of supply side economics, the rich get to make money first before anything trickles down. The metaphor might also be, before any crumbs fall. But I don't think crumb-under-the-table economics would have been successful marketing, though it's even more apt.

[dmallind]

37. people producing the demand?

Sure the owner makes more money than the machinist, but short of archetypal (and never actually realized) communism that's the way it works. If manufacturing improves people get hired, and many more people get to keep their jobs. is that a bad thing or a good thing?

Recessions worked like that before Reagan too. Outside a controlled economy or mass warfare it's the only way recessions do end. Jobs recover last not because of some manipulative robber baron conspiracy, but because by definition demands fall in a recession, so companies overproduce for a while until they slow down, and build up inventories. Then they lay off the workers, and as demand increases agian they sell off inventory before rehiring workers. Inventories incidentally have been falling consistently lately.

If it's any consolation, the equities market falls first and jobs fall last too. Look at when the indices started falling and when unemployment started going up.

[caseymoz]

40. Bad or good thing? Better than total slavery and mass starvation.

But I always wonder if whether the trend is in that direction. It looks to me like it could be-- in this nation, but more greatly, worldwide.

As I have come to understand it, demand falls in a recession because either the work basic to driving the economy has been done, such as people have enough PC's, and there's no flexibility to start up other industries, and/or because people and companies do not have money to make purchases at the price offered-- that is, the price of items do not have the immediate flexibility to move down to meet demand.

Jobs worked that way before Reagan? It seems to me that, at the very least, you did not have the really long lag times. There was another way of looking at it before Reagan: and that was a demand-driven economy. Whereby the way to make the economy recover was to see that people had some purchasing power.

Sorry, I think there's a lot of truth to the Robber Baron Conspiracy. Why wouldn't there be? Those people would be insane if there isn't one. They definitely have interests in common, and share the same Country and Social Clubs. Did you read Citi's little report about the worldwide "plutonomy," for plutonomists?

One thing for sure, we accept too easily that unfortunate economic downturns happen because of some immutable and natural economic laws. This recession was totally avoidable. It happened because the rentier class thought they could make more money all the time without any losses. It required that people be sold mortgages as quickly as possible. They messed up and they lost a bundle. They said oops, and we bailed them out, while people who weren't too big to fail took the dive. It happened because the rentier class managed to weedle the government into looking the other way while letting them put the fix in. So, fixing government rules, marketing mortgages as a consumer product, and turning the bad mortgages into derivatives. Those were several things that did not just happen to line up. That was definitely a conspiracy. The only thing that wasn't: how it unraveled.

Capitalism is archetypal and never realized as well, for reasons like that. Sometimes I think we are following the Soviet Union into the ash-heap of history. But Bolshevism wasn't what Marx would have ever had in mind, and if you read Marx's description of how capitalism would evolve and what the world would look like-- complete with franchises being copied everywhere, it is chilling.

[LeftHander]

10. By expelling employees....nt

[dmallind]

22. Some data may help

All too often the doomers claim some emotional bullshit about the US no longer being a manufacturer and being dependent on cheap imports. I know where this comes from of course - we do import huge amounts and LCC's have indeed put a dent in many US manufacturing industries. But we still both manufacture and export huge amounts by any standard. We dominate many new and growing industries, and some old ones too. Manufacturing surely has declined as a percentage of GDP, but then so has subsistence farming. As societies become wealthier, they naturally shift more and more to imports and services.

Here are the world's 3 largest exporters. I bet not one person in 20 would have guessedteh top one without seeing this before, or would have guessed we were so close to China as an exporter - with 1/4 the population.

1 Germany $ 1,498 2008 est.
2 China $ 1,435 2008 est.
3 United States $ 1,291 2008 est.

Here are the world's 4 largest manufacturers:

Country 1990 1995 2000 2005 2006 2007
USA 1,041 1,289 1,543 1,663 1,700 1,831
China 143 299 484 734 891 1,106
Japan 804 1,209 1.034 954 934 926
Germany 438 517 392 566 595 670


We remain the world's leading manufacturer (UN data and consistent calculation throughout) by far. Our growth is paltry and our lead is much smaller than it was, but we remain the world's biggest manufacturing engine.

Wikipedia (with cited siource data) provided the first list. Curious cat the second. All figures in billions of USD.

[Romulox]

24. Unrec for this doozy: "Manufacturing is 'one of the strongest sectors of the economy,'

:rofl:

[hayu_lol]

27. Here in south central Oregon...

even chain fast food joints are going under now.

Wonder if two recent plants(Whirlpool-Hersheys)are cranking up production in Mexico.

Many of our college grads(recent)are working part-time with no benefits. Latest job losses showed a reduction in new claims only 37,000 under the usual half million monthly losses.

This is not a recession--it is a depression.

[skoalyman]

29. all we manufacture is bull shit it drivels down from the top

:crazy:

[TexasObserver]

43. Recommend