Trump’s trade war isn’t hurting manufacturing . . . yet
Trump’s trade war isn’t hurting manufacturing . . . yet
The September PMI®registered 59.8 percent, a decrease of 1.5 percentage points from the August reading of 61.3 percent. The New Orders Index registered 61.8 percent, a decrease of 3.3 percentage points from the August reading of 65.1 percent.
Here is what the overall index and the leading new orders index look like since the turn of the Millennium (except for this morning’s report) (h/t Briefing.com):
Industrial production, particularly in the Oil patch, has been running hot this year. There has been some evidence of “front-running,” i.e., getting orders in before the tariffs take effect, in things especially like weekly railroad carloads. Going forward, what to watch for is new orders falling below their range from earlier this year, i.e., significantly below 60.
But there is no evidence yet of tariffs hurting the sector so far.
“Some” frontrunning? Sorry, but that accounts for a lot of it. Companies pumping up production despite not having the demand for it to fill warehouses. Imports have been surging in the 3nd quarter as well. The dry baltic index is up 13% despite no increase in demand.
The data is lying, period. Annualized contraction in 1st quarter growth probably will happen at this rate, when the tariff effect ends and producers cut back production.