The barometer of business conditions at American factories continued to show negative signs in November, marking the 13th consecutive month without improvement in the industrial sector of the economy. The Institute for Supply Management's manufacturing survey remained unchanged at 46.7%, a concerning figure as numbers below 50% indicate contraction. This negative trend has persisted for over a year, with the last similar occurrence happening during the Great Recession from 2007 to 2009. Economists surveyed by the Wall Street Journal had anticipated a slightly higher reading of 47.7%.
Key Details
Several key details are worth noting:
- The index of new orders experienced a modest increase of 2.8 points, reaching 48.3%.
- The production barometer, however, dropped by 1.9 points to 48.5%.
- The employment gauge slipped by 1 point, registering at 45.8%.
- The prices index, which serves as a measure of inflation, rose by 4.8 points, reaching 49.9%.
The Big Picture
Although there have been some indications that the industrial side of the economy may be approaching its lowest point, prevailing conditions are expected to remain weak as long as interest rates remain high. Consumer purchases of big-ticket items, like cars, tend to be discouraged by elevated interest rates, further restraining business investment. It is worth noting that heavy industry represents approximately 10% of the gross domestic product.
Looking Ahead
Despite the possibility of a slight improvement, survey Chairman Timothy Fiore stated that demand remains soft, suggesting that significant changes are unlikely in the near future.
Market Reaction
In Friday's trades, both the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) experienced slight gains.
Our Latest News
Bitcoin and Cryptocurrencies Show Bullish Momentum Amid ETF Optimism
Bitcoin and other cryptocurrencies are experiencing a bullish rally as optimism grows for the approval of ETFs, with Bitcoin surging over 30% since October.
Lizzo Faces Lawsuit Alleging Sexual Harassment and Hostile Work Environment
Lizzo, the Grammy-winning artist, is facing a lawsuit from three former dancers alleging sexual harassment and a hostile work environment. The plaintiffs assert...
Treasury Yields Drop as Fed Officials Express Dovish Views
Treasury yields drop following dovish comments by Fed officials, impacting bond yields and future interest rates. Factors influencing yields include recent viol...