US factory output at three-year low
US
manufacturing activity contracted for the first time in three years,
further denting confidence in a global economy that is already feeling
the effects of the eurozone debt crisis and China’s economic slowdown.
In a shock to economists who were expecting manufacturing growth to slow moderately, the Institute for Supply Management’s survey on the US industrial sector reported a large decline in activity from 53.5 in May to 49.7 in June – its lowest level since the recession ended in mid-2009.
Any reading in the ISM index below 50 indicates a contraction in activity, while above 50 signals an expansion. David Semmens, economist at Standard Chartered described the number as a “really terrible” result.
The weak ISM data came after purchasing managers surveys showed China’s industrial sector expanded at its slowest pace in seven months, while eurozone manufacturing also remained stuck at its weakest level in three years. “A significant part of the weakness looks to be trade contagion,” said Alan Ruskin of Deutsche Bank.
Eurozone manufacturing activity has contracted each month since August 2011. In Germany, the eurozone’s largest economy, the index for June showed manufacturing activity shrinking at its fastest pace since June 2009.
The ISM’s new orders index, although a traditionally volatile measure, was hit particularly hard and could signal a decline in overseas demand for US products. “The manufacturing sector is particularly vulnerable to the slowdown in global activity,” said Joshua Dennerlein of Bank of America Merrill Lynch.
Two weeks ago, the Federal Reserve extended “Operation Twist” – selling short-term government bonds while buying long-term debt – in an effort to support the economy by lowering long-term interest rates.
Further signs that America’s economy is feeling the impact of slower growth in emerging markets and continued turmoil in Europe could spur the US central bank to take more aggressive action in coming months including a new round of asset purchases, or “QE3”.
Record-high eurozone unemployment and continued manufacturing weakness could force the European Central Bank to lower rates later this week, according to Ken Wattret, economist at BNP Paribas.
“There is little in these numbers to challenge the view that the ECB should be cutting rates,” he said. “The only question is by how much.”
In the UK, the PMI was better than many analysts had feared, but still showed manufacturing activity had contracted for the second month in a row.
The Bank of England is expected to announce another round of QE later this week, given that the UK and global economy are far weaker than the Monetary Policy Committee had thought even just a few months ago.
In a shock to economists who were expecting manufacturing growth to slow moderately, the Institute for Supply Management’s survey on the US industrial sector reported a large decline in activity from 53.5 in May to 49.7 in June – its lowest level since the recession ended in mid-2009.
Any reading in the ISM index below 50 indicates a contraction in activity, while above 50 signals an expansion. David Semmens, economist at Standard Chartered described the number as a “really terrible” result.
The weak ISM data came after purchasing managers surveys showed China’s industrial sector expanded at its slowest pace in seven months, while eurozone manufacturing also remained stuck at its weakest level in three years. “A significant part of the weakness looks to be trade contagion,” said Alan Ruskin of Deutsche Bank.
Eurozone manufacturing activity has contracted each month since August 2011. In Germany, the eurozone’s largest economy, the index for June showed manufacturing activity shrinking at its fastest pace since June 2009.
The ISM’s new orders index, although a traditionally volatile measure, was hit particularly hard and could signal a decline in overseas demand for US products. “The manufacturing sector is particularly vulnerable to the slowdown in global activity,” said Joshua Dennerlein of Bank of America Merrill Lynch.
Two weeks ago, the Federal Reserve extended “Operation Twist” – selling short-term government bonds while buying long-term debt – in an effort to support the economy by lowering long-term interest rates.
Further signs that America’s economy is feeling the impact of slower growth in emerging markets and continued turmoil in Europe could spur the US central bank to take more aggressive action in coming months including a new round of asset purchases, or “QE3”.
Record-high eurozone unemployment and continued manufacturing weakness could force the European Central Bank to lower rates later this week, according to Ken Wattret, economist at BNP Paribas.
“There is little in these numbers to challenge the view that the ECB should be cutting rates,” he said. “The only question is by how much.”
In the UK, the PMI was better than many analysts had feared, but still showed manufacturing activity had contracted for the second month in a row.
The Bank of England is expected to announce another round of QE later this week, given that the UK and global economy are far weaker than the Monetary Policy Committee had thought even just a few months ago.
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Envie Dinero a USA
US election: Barack Obama begs donors for more as Mitt Romney rakes it in
Barack Obama has issued a plea for wealthy supporters to give him more money and stop his re-election campaign being outspent by Mitt Romney and the Republican's billionaire backers.
Mr Obama received another warning
yesterday as Rupert Murdoch, the chairman of News Corporation, indicated
that he would throw his influence behind Mr Romney Photo: AP
In a phone call from Air Force One, the
President reportedly told a group of top donors "I can't do
this by myself" and urged them to open their cheque books to "meet
or exceed what you did in 2008".
Noting that most had "maxed out to my campaign last time," Mr Obama
told them: "I really need you to do the same this time," according
to a leaked transcript.
Despite holding a narrow lead over his rival, the president informed the
supporters that his ability to campaign and broadcast advertisements in key
battleground states such as Florida and Ohio directly depended on their
generosity.
Details of the call emerged days after Mr Obama warned supporters that he
would be "the first president in modern history to be outspent" by
his opponent unless donors upped their contributions.
Mr Romney and his party raised $76 million (£49 million) for their campaign in
May, while Mr Obama – who had not been out-raised in five years – brought in
$60 million (£38 million) with the Democrats.
Romney aides have boasted that their haul for June may exceed $100 million
(£64 million), after being boosted by Right-wing anger over the Supreme
Court's approval of Mr Obama's health care reforms.
While he remains ahead overall in the money race for the time being, loose talk of Mr Obama being the first candidate to raise $1 billion (£640 million) has been silenced by the Romney machine.
"In 2008 everything was new and exciting about our campaign," Mr Obama said, according to a recording of the call obtained by The Daily Beast, a news website. "And now I'm the incumbent president. I've got grey hair. People have seen disappointment because folks had a vision of change happening immediately. And it turns out change is hard".
Joe Trippi, a leading Democratic strategist, said Mr Obama's network of donors had been slow to realise that they could lose, thanks to the circus-like quality of the Republican party primary contest.
"People have to perceive that they are threatened before they give," Mr Trippi told The Daily Telegraph. "Until recently, most Democrats thought there was no way Romney could beat the President, so he didn't need their money. That is changing quickly." Several "Super PACs" - external campaign groups that can raise unlimited corporate cash for the first time in this election - are bolstering the Romney effort while failing to similarly assist Mr Obama.
Restore Our Future, the main group backing the Republican, has raised about $61.5 million (£39 million) – more than three times that raised by Priorities USA Action, which backs Mr Obama.
Sheldon Adelson, a casino tycoon who last month gave Restore Our Future $10 million (£6.4 million), has pledged to spend "whatever it takes" to kill Mr Obama's "socialist agenda", friends have said.
The president told donors on the conference call: "We're going to have to deal with these Super PACs in a serious way," adding unless he secured re-election, the "special interests" supporting Mr Romney would be running "Congress and the White House" from November.
Mr Obama received another warning yesterday as Rupert Murdoch, the chairman of News Corporation, indicated that he would throw his influence behind Mr Romney.
After a posting series of messages to his Twitter account criticising Mr Romney's campaign, Mr Murdoch said: "Of course I want him to win, save us from socialism, etc".
Mr Obama leads Mr Romney by 3.4 percentage points in national polls, according to an aggregate by RealClearPolitics. He also holds narrow leads in several potentially crucial swing states.
While he remains ahead overall in the money race for the time being, loose talk of Mr Obama being the first candidate to raise $1 billion (£640 million) has been silenced by the Romney machine.
"In 2008 everything was new and exciting about our campaign," Mr Obama said, according to a recording of the call obtained by The Daily Beast, a news website. "And now I'm the incumbent president. I've got grey hair. People have seen disappointment because folks had a vision of change happening immediately. And it turns out change is hard".
Joe Trippi, a leading Democratic strategist, said Mr Obama's network of donors had been slow to realise that they could lose, thanks to the circus-like quality of the Republican party primary contest.
"People have to perceive that they are threatened before they give," Mr Trippi told The Daily Telegraph. "Until recently, most Democrats thought there was no way Romney could beat the President, so he didn't need their money. That is changing quickly." Several "Super PACs" - external campaign groups that can raise unlimited corporate cash for the first time in this election - are bolstering the Romney effort while failing to similarly assist Mr Obama.
Restore Our Future, the main group backing the Republican, has raised about $61.5 million (£39 million) – more than three times that raised by Priorities USA Action, which backs Mr Obama.
Sheldon Adelson, a casino tycoon who last month gave Restore Our Future $10 million (£6.4 million), has pledged to spend "whatever it takes" to kill Mr Obama's "socialist agenda", friends have said.
The president told donors on the conference call: "We're going to have to deal with these Super PACs in a serious way," adding unless he secured re-election, the "special interests" supporting Mr Romney would be running "Congress and the White House" from November.
Mr Obama received another warning yesterday as Rupert Murdoch, the chairman of News Corporation, indicated that he would throw his influence behind Mr Romney.
After a posting series of messages to his Twitter account criticising Mr Romney's campaign, Mr Murdoch said: "Of course I want him to win, save us from socialism, etc".
Mr Obama leads Mr Romney by 3.4 percentage points in national polls, according to an aggregate by RealClearPolitics. He also holds narrow leads in several potentially crucial swing states.
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