G.O.O.D

Source: Bloomberg.com

The decline in U.S. manufacturing deepened in December as demand for such products as cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.

The Institute for Supply Management’s factory index fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month. Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949.

“Every component suggests that the weakness is going to carry over into 2009,” Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Television interview. “There’s just not a whole lot of new business coming in,” and companies will have a “painful adjustment” as consumers shun spending.

Today’s figures underscore that, with private demand collapsing, manufacturers’ best hope for new business this year may be President-elect Barack Obama’s plans for an unprecedented stimulus package. Obama has pledged an investment program in roads, schools and the U.S. energy network akin to the 1950s- era interstate highway construction boom.

Stocks advanced on the first day of trading in 2009, following the biggest annual drop for the Standard & Poor’s 500 Index in 71 years, on expectations government stimulus efforts will curtail the recession. The S&P index rose 1.4 percent to 916.16 at 11:08 a.m. in New York. Benchmark 10-year Treasury yields rose to 2.25 percent from 2.22 percent late Dec. 31.

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Source: washingtonpost.com

U.S. manufacturing fell sharply in December and reports from abroad showed the same for plants in Europe and Asia, as businesses cut production and slashed product orders in response to the global recession.

The Institute for Supply Management’s index of industrial production slipped by 3.8 percentage points in December compared to the month before, to the lowest level since 1980.

The private group’s survey of purchasing executives provides a rough guide to whether manufacturing companies are expanding output and receiving increased numbers of orders, or seeing their business decline. The index for December stood at 32.4, compared to 36.2 in November. An index above 50 indicates that manufacturing activity is expanding, while a reading below 50 indicates a decline.

It is the fifth consecutive month that the group’s measure of industrial production has stalled, a result consistent with declining consumer demand and economic weakness throughout the United States.

The decline was both deep and broad, the ISM reported: none of the industries covered in the survey reported an expansion in their business, and the drop registered not just in the institute’s index of production, but also in its measures of employment, prices and backlogged orders. The group’s index of new orders and prices were at their lowest levels since the late 1940s.

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Source: Bloomberg.com

Recession Officially Here

The U.S. economy, now officially in recession, may be in the midst of the longest slump in the post- World War II era as job losses mount and credit dries up.

The economic slump began in December 2007 when payrolls reached a peak, the business cycle dating committee of the National Bureau of Economic Research, a private, nonprofit group of economists based in Cambridge, Massachusetts, said yesterday. The last time the U.S. was in a recession was from March through November 2001, according to NBER.

“We’re going on 12 months already, and we’re just getting started,” said Stephen Stanley, chief U.S. economist at RBS Greenwich Capital in Greenwich, Connecticut. “We’re looking at some pretty severe numbers for the fourth quarter, and the first quarter of 2009 will be pretty bad as well. The economy isn’t going to turn around definitively until the credit markets unclog.”

The NBER designation means the U.S. was the first country to have slipped into a contraction. While definitions differ, the economies of both the euro area and Japan fell into a slump in the second quarter of this year, making it the first simultaneous recession in the three regions in the postwar era.

The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The Great Depression lasted 43 months, from August 1929 to March 1933.

“This may be referred to as the Great Recession,” because of its length, said Norbert Ore, chairman of the Institute for Supply Management’s factory survey. “It looked like we were headed for a shallow recession earlier in the year because of higher energy prices. With the meltdown in the financial sector, it has become something more serious.”

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Source: Yahoo! Finance

A gauge of U.S. manufacturing activity that fell to a 26-year low Monday followed similarly weak readings in Europe and China, fueling fears of a deepening global downturn.

The Institute for Supply Management’s index of manufacturing activity for November fell to 36.2 from October’s 38.9. The reading was worse than Wall Street economists’ expectations of 38.4, according to a survey by Thomson Reuters. A figure below 50 indicates the sector is contracting.

The November reading is the lowest since May 1982, the Tempe, Ariz.-based ISM said. The report is based on a survey of corporate purchasing managers.

The report came the same day that the National Bureau of Economic Research, a private group, said the U.S. economy has been in a recession since December 2007.

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Stock Market Down

Source: International Herald Tribune

U.S. stocks tumbled at the open Monday and the Standard & Poor’s 500 Index fell for the first time in six days on concern that the global economic slump is deepening.

General Electric slid 5.8 percent and Caterpillar lost 6.3 percent before a report from the Institute for Supply Management that may show manufacturing contracted in November at the fastest pace in 26 years. Hess and Anadarko Petroleum dropped more than 6.8 percent as oil retreated below $52 a barrel. Benchmark indexes from London to Tokyo dropped following record declines in European and Asian factory production.

“The economic news is going to continue to get worse before it gets better,” said Leo Grohowski, the New York-based chief investment officer for the wealth management unit of Bank of New York Mellon. “The biggest single challenge in terms of the economy is the state of housing and it still remains precarious.”

The S&P 500 sank 3.6 percent to 864.01 after the open in New York. The Dow Jones Industrial Average fell 258.3 points, or 2.9 percent, to 8,570.74. The Nasdaq Composite Index declined 3.4 percent to 1,483.41. About 16 stocks retreated for each that rose on the New York Stock Exchange.

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Source: MarketWatch

The nation’s manufacturers continued to cut back production sharply in October for the second straight month, the Institute for Supply Management reported Monday. The ISM index fell to 38.9% in October from 43.5% in September. This is the lowest level since September 1982. The size of the decline was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to fall to 41.5% as all regional manufacturing surveys were weak in October. Both new orders and production fell to their lowest level since the early 1980s. Readings below 50 indicate contraction. The ISM index had plunged in September to recession territory of 43.5% from 49.9% in August.

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