Kamara talks about factories booming, but in reality manufacturing is in decline
The economy is not cooperating with Kamala Harris’ attempt to change policy Economic performance of the Biden-Harris administration be politically advantageous.
A key part of Vice President Harris’ appeal to Americans as she runs for president has been focused on the U.S. manufacturing sector, which she recently argued is thriving. The problem is, Manufacturing is in real recession It is serious enough to threaten the labour market, the construction sector and growth of the economy as a whole.
of Institute of Supply Management The Institute of Manufacturing released results from its latest monthly survey of manufacturing executives on Thursday. The so-called Purchasing Managers’ Index (PMI) fell to 46.8 in July from 48.5 in June. A reading below 50 indicates a contraction.
Manufacturing contracts for fourth straight monthAccording to the ISM, economic growth has contracted in 20 of the past 21 months.
In July, the contraction worsened, with the index dropping to The lowest level in eight months.
“U.S. manufacturing activity has fallen into a deeper contraction,” said Timothy Fiore, chairman of ISM Research. “Demand remains subdued as current federal monetary policy and other conditions make businesses reluctant to invest in capital and inventory.”
The production index fell 2.6 points to 45.9. The worst figures since the economy was largely shut down in May 2020.
The employment index fell 5.9 points to 43.4. The lowest figure in four yearsIn a separate report released this week, payroll company ADP said private manufacturing employment fell in July.
The new orders index, a key indicator of demand, fell 1.9 points to a weak 47.4.
S&P Global survey also shows decline in manufacturing activity
Over the past few months, S&P Global PMI The manufacturing picture was much more positive than the ISM survey, but not anymore.
July, S&P Global PMI The economic downturn was also recorded.New orders fell for the first time in three months, so production was only being bolstered by backlogs of work and replenishment of finished goods inventories.
“Business conditions worsened in July as new orders fell for the first time since April and production came to a near halt, with purchasing activity falling and hiring slowing on concerns about weaker-than-expected sales,” said Chris Williamson, chief business economist at S&P Global.
Unlike the ISM employment index, Suggests job lossesS&P said manufacturing employment continued to grow, but the growth was slow and at the slowest pace since January.
Building Factories but Not Creating Jobs
The Biden-Harris administration A tsunami of new subsidies and tax cuts The goal was to convince American companies to pump money into domestic manufacturing facilities. This has worked in the most immediate sense: Last month, construction spending reached an annual high of more than $235 billion. Compared to a year ago, manufacturing construction spending is up 19 percent. Compared to pre-pandemic levels, it’s up an astounding 200 percent.
This has created jobs, but not manufacturing jobs. So far, All the jobs were in construction. Construction jobs added 235,000 in the 12 months through June, about 9% of the total job growth. While much of that was in homebuilding, a significant share of the employees were in factory construction.
Vice President Kamala Harris visits a construction site in Pittsburgh on February 20, 2024. (Official White House Photo by Lawrence Jackson via Flickr)
but Actual factory employment has stagnated and fallen to zero.Manufacturing employment has increased by just 5,000 over the past year. Payrolls increased in just two of the first six months of the year. Last month, it fell by 8,000. Wall Street sees manufacturing payrolls probably falling again in July.
Construction jobs are also likely to dry up. Spending on factory construction rose just 0.1% in June, down from The construction boom fuelled by subsidies and tax breaks may be over.Construction is likely to remain sluggish because many of the projects that took place over the past two years were future plans brought forward by subsidies — a tactic that makes sense in an economic downturn but is a wasteful one in an economic expansion.
with this Even harder for Harris Trump and his allies have argued that the Biden-Harris administration’s track record gives Harris a fighting chance at the presidency.
