The service sector is the throne room of America's economic castle. Nobody deserves a recession more than the USA for throwing the whole world's economy under the bus (including its own) just to try to stop China from outgrowing it.
OCTOBER 6, 2019 / 9:00 PM / UPDATED 17 HOURS AGO
RPT-COLUMN-U.S. manufacturing slowdown spreads to services: Kemp
LONDON, Oct 4 (Reuters) - The U.S. economy faces the greatest risk of outright recession for a decade as the slowdown spreads from manufacturing to the much larger and more stable service sector.
Most indicators show manufacturing has already started to shrink with purchasing managers’ surveys and new orders pointing to a decline in activity levels in recent months.
The Institute for Supply Management’s composite purchasing managers’ index for manufacturing fell last month to its lowest level since the last recession in 2009.
The manufacturing downturn is now more widespread than either of the mid-cycle slowdowns in 2012 and 2015/16, according to the ISM survey (
).
The survey’s new orders component was far into contraction territory in both August and September which suggests activity is likely to decline further in the short term.
So far, the slowdown has been concentrated in manufacturing, driven by a sharp retrenchment in business investment plans and spending on other durable goods.
New orders for non-defense capital equipment excluding aircraft, a proxy for investment spending, fell marginally in the three months from June to August compared with the same period a year earlier.
New orders have slowed from growth of more than 8% at the same point in 2018 and are now falling for the first time since 2015/16.
