Headwind on Jobs

Manufacturing Grows at Slowest Pace in 8 Months as Hiring Stalls

U.S. manufacturing activity grew in June at its slowest pace in eight months as overseas demand dried up and firms took on the fewest new workers in more than three years, a survey showed on Monday.

Financial data firm Markit said its final U.S. Manufacturing Purchasing Managers Index stood at 51.9 in June, below 52.3 in May and a preliminary June estimate of 52.2.

A reading above 50 indicates expansion in the sector.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

The output index rose to 53.5 from 52.7 but domestic orders were little changed and orders from abroad fell at their fastest rate since the height of the financial crisis in mid-2009.

The employment sub-index fell to 49.9, the lowest since January 2010 and "consistent with roughly 30,000 jobs being lost per month in the manufacturing sector," according to Markit chief economist Chris Williamson said. It stood at 52.6 in May.

"Firms are responding to the increasingly worrying order book trend by pulling back on recruitment," Williamson said.

That could complicate things for the Federal Reserve, which said it could begin scaling back its massive stimulus program later this year provided the economy does not lose momentum.

Economists polled by Reuters expect growth in the broader U.S. economy to have slowed to 1.7 percent in the second quarter from 1.8 percent in the first, though most say it should pick up steam in the second half.

The U.S. jobless rate stood at 7.6 percent in May, the latest month for which figures were available. Fed officials recently said they expect it to fall to between 6.5 percent to 6.8 percent by the fourth quarter of next year.

Source: © 2013 Thomson/Reuters. Monday, 7-1-13
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Comments:

Declining global demand adds to the elimination of full-time jobs due to Obamacare premium increases and fines.  Real unemployment is 25% due to excessive legal immigration at 1.8 million a year and systemic illegal immigration. It would be worse but for job gains in oil and gas fracking in the upper Midwest.
Norb Leahy, Dunwoody GA Tea Party Leader