Obama’s Achilles Heel

Articles regarding the bravado of the Obama campaign campaign seem more and more like whistling past they graveyard as data continues to stream in telling a very different story. I blogged about the economy as Obama’s Achilles heel before and today was another stark reminder that his economic policies have failed. Regardless of media willingness to carry water for the Obama campaign and aggressively cover any story EXCEPT the economy, the drumbeat of bad economic data grows louder and louder as we approach election day. Obama may have entered the Presidency during an economic crises, but he’s leaving the White House much like he found it:

The US manufacturing sector contracted for the third straight month in August, the longest slide since the recession ended, in line with recent data showing a pullback in business spending. The Institute for Supply Management said its manufacturing index declined to 49.6, the lowest level since July 2009. That followed readings of 49.8 in July and 49.7 in June and came in below expectations of 50. A reading below 50 indicates contraction. There have not been three straight readings below this contraction line since May-July 2009.

ISM surveys more than 300 manufacturing companies on employment, production, new orders, supplier deliveries and inventories. “The data continue to show a significant loss of momentum in manufacturing in recent months, although the overall index is still well above the low 40s levels typically associated with recession,” said Jim O’Sullivan, chief US economist at High Frequency Economics.

The new orders measure, an indicator of future demand, fell to 47.1, the lowest since April 2009, from a reading of 48 the prior month as a result of the slowdown in China. Concerns about China’s growth, combined with uncertainty in Europe and worries about the US deficit, have made corporations more cautious about investment and hiring. Slowing orders pushed the production index down to 47.2, the weakest since May 2009, from 51.3 in July.

The employment index fell to 51.6, the lowest since November 2009, from 52 the prior month. Analysts said this was particularly concerning after July’s payroll report suggested that conditions were improving. The new export orders index rose slightly to 47 from 46.5. It was down sharply from the 56.2 level averaged in the first five months of the year.

Separately, US Commerce Department data showed total construction spending declined unexpectedly by 0.9 per cent in July to $834.3bn. The data, which fell well below analysts’ estimates of a 0.4 per cent rise, followed a 0.4 per cent rise in June and a 1.6 per cent jump in May.

2 Trackbacks

  1. […] over any distractions he and the media can create. We’ve blogged about some of the underlying weak economic data before but the horrific unemployment situation always looms […]

  2. […] is much the same as the manufacturing  sector which contracted for the third straight month in August.  We’ll find out next week of Obama can make it four-in-a-row.  There had not […]

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