Mfg PMI 47.6, Last 50.4. . . . Exp. 50.0,
Services PMI 46.1, Last 47.8 . . . Exp. 48.0,
The story is about the decline and the fact that the decline is “sharp” enough to be compared with 2009.
Personally what I find most disturbing is not the M-overM change nor the Y-over-Y change it is that the expectations were yet again so much rosier and more optimistic than reality. The US has a strong economy (compared to say Sri Lanka or wherever) but that means we can handle declines IF WE PREPARE FOR THEM.
The clown parade of overly optimistic forecasts is not coming from the Whitehouse, nor form a lefty think tank. The problem is more endemic than that. These are the fallacious overly-optimistic forecasts of Wall St Analysts recently trained in american universities.
Every day I read about ‘x’ company axing 1000 jobs they are struggling with interest rates. If the Fed manages to get this under control politicians need to bring back Simpson and Bowles and try to reduce the debt or there will come a time the Fed can’t reduce inflation because there out of tools.
Of course they won’t do that so Japan stagflation here we come
Imagine for a moment that the circa 2009 financial crisis is upon us.
IOW imagine we are about to go through that again, (because that is what the PMI suggests.) That would be bad, but it would be only “as bad as” the 2009 financial crisis itself.
Now imagine that happens but it catches a lot of people, from middle class folks to purchasing managers at your firm completely by surprise. That would be worse.
The services PMI dropped from 47.8 to 46.1 but what is worse is the fact that analysts were anticipating an increase. Do that too much and it’s like the eye of a hurricane and someone gives the “all clear” signal. Hurricanes are bad enough if you’re in the shelter and you’ve stocked up on water and the coasts have been evacuated. They are far worse if they catch New Orleans by surprise.
