Economy Gets Bad Press Again

The bad news about the manufacturing sector slowdown is widely sensationalized in the financial press. With the exception of The New York Times, the media coverage of the slump in manufacturing neglected to report the fact that only 11% of the U.S. gross domestic product is derived from manufacturing activity. Without that context, the press would have you think a recession is right around the corner when it's not.

Since September 2018, manufacturing activity plunged from a record-high of 61.3%. Last week's manufacturing activity report showed further deterioration, from 51.2% in July to 49.1% in August, and the press covered it widely.

This monthly manufacturing data series from the Institute of Supply Management, which certifies purchasing management professionals employed across the U.S. and globally, is designed to signal a recession when it falls to less than 50%. In the last three decades, it has predicted six of the last three recessions.

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This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

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