US Manufacturing Contracts At Its Fastest Pace Since 1982

Manufacturing activity continued its plunge through November despite a record-breaking drop in input costs, suggesting the recession the economy is diving into is growing more severe with time. In its November reading of factory activity, the Institute for Supply Management's gauge fell another 2.7 points to 36.2 - its lowest reading since 1982. The plunge production activity over the past two or three quarters has been severe and is clearly reflective of the quick turn in growth trends over this past year and the amplifying influence that the credit crisis has had. Looking at the report's details, all of the major component readings were worse or unchanged. Most concerning was the drop in production to August 1980 lows, a contraction in orders to levels not seen since June of 1980 and the worst reading for employment since 1991. The labor statistics are the most concerning as consumer spending is the primary driver of growth, and lost jobs as well as curbed production hint at an equilibrium that is much deeper in recession territory than the economy is currently standing.

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