Thursday, October 2, 2008

Recent Data


Even if the House backs up the Senate and passes the bailout bill, that won’t save us from recession.

Yesterday the Institute for Supply Management released its Purchasing Managers’ Index for September: 43.5 (above 50 = manufacturing expanding, below 50 = manufacturing contracting). The index has been hanging out for months at just under 50. The recent figure indicates a sharp contraction in manufacturing activity.

Meanwhile the Commerce Department just disclosed that the auto industry sold 12.5 million vehicles in September. Last year’s September figure was 16.1 million. Enough said.

Finally, the Census Bureau announced today $68.6 billion worth of new orders for nondefense capital goods in September. It’s been flat, averaging in the mid 70s, for most of the year. Another sharp drop.

The bailout can’t reverse these trends. We may have been saved from a severe recession, but we haven’t been saved from recession.

© 2008 Michael B. Lehmann

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