The US Hasn’t Seen a Manufacturing Slowdown Like This Since the Last Financial Crisis

The crisis that so many have been anticipating is starting to play out

  • How is that consistent with the “booming economy” narrative that the economic optimists are endlessly pushing?
  • And all of this is happening even though the authorities are already implementing emergency measures in a desperate attempt to support the faltering U.S. economy, but it isn’t working.
  • The truth is the crisis that so many have been anticipating is starting to play out.

This isn’t what was supposed to happen.  According to the economic optimists, there was going to be a great “manufacturing renaissance” as America entered a wonderful new golden age of boundless prosperity.

But of course that is not what has happened. Manufacturing activity has been declining for the past three months, and all across the country we are seeing economic conditions rapidly deteriorate.

Over and over, we are seeing economic numbers that are worse than anything we have seen since the last recession, but the economic optimists keep assuring us that these are just temporary blips on the way to America’s glorious economic renewal.

Well, they can keep believing in a mirage of future prosperity if they want, but the hard numbers keep telling us another story. For example, the Chicago Purchasing Managers Index has now fallen to a level that was “last sustained during the financial crisis”

Manufacturing activity across the country has contracted for three months, according to closely watched ISM data. In the Midwest, the slowdown has been more severe. The Chicago Purchasing Managers Index shows backlogs dropping to a level touched briefly four years ago but last sustained during the financial crisis.

In the middle of the country, it already feels like a manufacturing recession for many business owners. Manufacturing facilities are being closed down, machines are being idled and thousands of workers are being let go. The following comes from a CNBC article about our current manufacturing slowdown

At Ameri-Source Metals’ machine shop outside Pittsburgh, stacks of graphite stubs have begun to pile up in a quiet corner.

Founder Ajay Goel said the customer who typically buys the stubs – a multinational chemicals company – now only needs one-fourth of the amount he used to produce. As a result, the machines have been idled and the workers who serviced them, laid off.

That sure doesn’t sound like a “booming economy” to me.

So far this year, thousands upon thousands of manufacturing workers have been laid off in the Upper Midwest. By now, we were supposed to be adding large numbers of these good paying jobs, but instead we are losing them at a frightening pace.

In fact, it is being reported that more than 8,000 manufacturing jobs have been lost in the key state of Pennsylvania alone…

From January to September, the states bordering the Great Lakes have lost more than 25,000 manufacturing jobs: Pennsylvania lost 8,100; Ohio lost 6,000; Michigan lost 6,500; and Wisconsin lost 4,700.

Of course it isn’t just the manufacturing industry where employment is cooling off. At this point, the number of job openings in the U.S. has fallen to an 18 month low, and it is expected to fall ever further in the months ahead.

Things have already gotten so bad that the mainstream media is running articles about how ordinary Americans can prepare for the coming recession. For instance, the following comes from a CNN article entitled “What can you do now to financially prepare for a layoff later?”

Sometimes, there are warning signs that you are in danger of being laid off — a buyout of your company, a merger or a strategic change in direction. Other times, the cuts come without warning. But while being laid off is not in your control, being financially prepared for such an event is.

“Companies evolve, change and fail and employees, and even business owners, need to be prepared for the unexpected,” said Mike Silane, a chartered financial analyst with 21 West Wealth Management.

And remember, all of this is happening even though the federal government is running trillion dollar deficits and the Federal Reserve is using up all the ammunition that they should be saving for the depths of the next recession.

In essence, the authorities are already implementing emergency measures in a desperate attempt to support the faltering U.S. economy, but it isn’t working.

This week, we learned that orders for Class-8 trucks in the month of October were down 51 percent from a year ago.

Can anyone explain to me how that is consistent with the “booming economy” narrative that the economic optimists are endlessly pushing?

Unfortunately, the truth is that we can see signs of a major slowdown all around us.  U.S. business hiring has fallen to a 7 year low, the Cass Freight Index has declined for 10 months in a row, and manufacturing is now the smallest share of the United States economy that it has been in 72 years.

But despite all of the evidence that is staring them right in the face, the economic optimists continue to insist that everything is probably going to be okay.  In fact, Goldman Sachs CEO David Solomon is telling us that “the chance of a U.S. recession between now and the election is small”

“I’ve said that I still think the chance of a U.S. recession between now and the election is small — in the distributions of outcomes, it’s a smaller outcome — I said roughly 25%,” Solomon told Bloomberg Television in Berlin on Tuesday. “Nine months ago I probably would have told you it was very small, kind of 15%,” he said. “So I do think the uncertainty has increased a little bit some of the risk,” but economic data and earnings momentum have held up well and American consumers are “still very healthy,” he said.

Of course the truth is that American consumers are actually not “very healthy” at this moment.  Consumer confidence has fallen for 3 months in a row, and 44 percent of all Americans currently do not make enough money to cover their monthly expenses.

That is one of the reasons why consumers are piling up staggering amounts of debt, and that consumer debt bubble is starting to burst.

Unfortunately, the economic optimists will continue to push their false narrative up until the very end, and lots of people will believe them.

You can believe them too if you want, but it won’t change what is about to happen.

The crisis that so many have been anticipating is starting to play out, and our problems are likely to greatly accelerate in the months ahead.

Source: The Economic Collapse

  1. Ronnie&MargaretInDementia says

    They’ll just print more money, theyve done $3.7 trillion so far and it hasn’t really affected inflation so my guess is they’ll just keep the printing presses going until the dollar becomes worthless or hyper inflation takes hold. But yeah, it’s pretty much downhill all the way now, it’s just a question of how long. Putin mentioned in a speech last week at forum that the US dollar wasn’t going to be default currency much longer, that’s a pretty big thing to just drop in there from the president of a super power. Mark Carney, governor of the bank of england also mentioned this at the woods hole forum in the US a couple of months ago, said it was time that the US stopped having this unique weapon and was suggesting a basket of mixed currencies as an option. There’s also stories doing the rounds that the Fed is currently bailing one of the big banks out at present but refusing to say who it is. It’s either Deutsche Bank or JP Morgan. DB has over €70 trillion in derivatives exposure and has recently undergone a ‘restructuring’ with the loss of around 20 thousand jobs. Another big one coming it seems.

  2. Vish says

    So the American Empire and its rapacious capitalist system are imploding.

    Too bad, so sad.

    The phrase “Reaping What You Have Sown” is applicable here–just like it is applicable for the American Reichstag Fire event better known as 9-11.

    Americans may stand reality on its head and portray themselves as the *victims* of other nations, while throwing a massive Pity Party for themselves.

    But the reality outside the America Matrix is different:

    America has been raping, exploiting, and colonizing nations around the world under the pretext of “freedom and democracy” for decades.

    This is the nature of the American Empire and its system of capitalist wage slavery–as exposed by John Perkins, who was a former NSA operative that participated in these crimes:

    Confessions of an Economic Hit Man

    Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions

    And no, the so-called average American is not innocent.

    They are guilty too.

    Americans will promote the lies, propaganda, and psychological projection tactics that their beloved American Empire is guilty of–because their precious USA “Way of Life” is based on America’s ability to steal the resources of other nations, exploit their workers, and colonize them in all but name.

    The Good Americans are nothing more than the Good Germans of today. Treat them with the contempt that they fully deserve.

    1. JustPassingThrough says

      “American Reichstag Fire event better known as 9-11”
      nicely said.
      had not thought of it in those terms.
      right on.👍🏿

  3. JustPassingThrough says

    what comes around goes around.
    this society of carpetbaggers, preachers, leeches and war mongers is finding there is no free lunch.
    in fact there ain’t no lunch at all.

    1. Canosin says

      normally I would cherish these news regarding the actual state of the union, when looking in geopolitics ….. but thinking of the thousands of innocent people losing their jobs makes me very sad…. ultimately it’s always the working class paying the price for the speculators in Wall Street. …. and the liars in WDC

  4. Mary E says

    The only slice of the economy that is and will continue to do well is the arms manufacturers…even if the US can’t afford to take care of its infrastructure and environment, they will be able to spend like drunken sailors on their eternal wars.
    Pathetic! Oh, and lest we forget: the fraudulent Wall St. banksters will continue to profit off the losses! Go figure!

  5. James Willy says

    So is this going to bankrupt the exceptional ones? Probably not. Looks like we are going to have to live under these yankys for who knows how many more years. When is somebody or something going to finally destroy them? We keep hearing how they are collapsing, but yet we are still having to live under them. Just another wishful thinking article. Thanks Mike.

    Thankfully the winter is pounding the heartland good and hopefully now it turns to 60 below and stays that way. A 12 mag EQ would be nice for yankyland too.

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