U.S. manufacturing is down for the month of June.
July 3, 2012- Manufacturing in the U.S. shrank during June for just the first time in nearly 36 months, as new orders dropped. The Institute for Supply Management announced Monday that its index of activity in factories in the U.S. dropped to 49.7 from May’s 53.5. The estimate set forth by a group of economists had been 52.0. This was the starkest sign yet seen that indicates the economy is in a slowdown.
In June, it was the first time since July of 2009 that the index had dropped below 50, the mark that is a separating point for growth and contraction. The last time it shrank was just after the U.S. emerged from the financial crisis and subsequent recession.
During the recovery of the U.S. economy, manufacturing has emerged as one of the drivers, which now appears as if it is losing steam over fears of the debt crisis in Europe, a slowdown in Asia and continued uncertainty about U.S. fiscal policy.
Economists said that the slowdown in manufacturing is the biggest sign thus far that the economy in the U.S. is experiencing the slowdown that has already taken hold in China and Europe. The report, said on economist, is equal to an economy growing at a yearly rated of below one percent after a 1.9% growth during the first three months of the year. Economists’ dismissed the thought the U.S. was in another recession, as they said the index would have to be under 47 for that to be certain.