Manufacturing shrank at its sharpest clip in more than three years in August, the third month of contraction in a row, and firms hired the fewest workers since late 2009, a survey on Tuesday showed.
The Institute for Supply Management said its index of national factory activity fell to 49.6 in August from 49.8 in July.
The reading fell shy of the 50.0 median estimate in a Reuters poll of economists. A reading below 50 indicates contraction in the sector.
The index's employment component fell to 51.6, the lowest since November 2009, from 52.0 in July.
"It is without question a soft report on manufacturing and what is particularly disconcerting is that the new orders index deteriorated again," said Tom Porcelli, chief U.S. economist for RBC Capital Markets. "It has become increasingly clear that the manufacturing sector is losing momentum. This soft report leading into Friday's payrolls will only solidify additional action from the Fed if we see another soft jobs report."
New orders, a forward-looking sub-index, fell to 47.1 in August, the worst showing since April of 2009. It stood at 48 in July.
The exports index ticked up to 47 last month from 46.5 in July but remained in contraction territory as recession in parts of Europe and slower growth in Asia sapped demand for U.S. goods.
"Given everything we see internationally in terms of demand for our manufacturers, a little slowdown is to be expected, especially with the euro zone still under pressure and emerging economies experiencing relatively slow growth," said Patrick O'Keefe, director of economic research at J.J. Cohn. "Domestically, new orders for manufacturing were up a bit but not robustly so it isn't unexpected to see something a bit more cautious."
Reuters contributed to this report.
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Why is this data significant? Just because the economists say it is?
What if everything that was manufactured was built to last, and for easy repair? If that was the case across the planet, then once you had the basic infrastructure manufactured, you could ease off and just let it run. Couldn't you?
The whole machine age was originally sold to the population (when it couldn't be forced down their throats) on the basis that is would increase efficiency, relieve us of drudge work, and basically cause a spiritual elevation across the boards. And I don't see any reason why it couldn't actually do that.
Obviously, this was not the actual intention of the "captains of industry." Apparently their plan was to phase out human workers completely, and reap all the benefits of the machine age for themselves.
And so we are told that we must hectically continue to make more stuff! If we keep this up, we will bury ourselves under mountains of our own discarded manufactured goods! How far down this road do we need to travel before some of these basic truths begin to become obvious?
We need a post-industrial game.
THEIR post-industrial game is to replace people with machines. People are bothersome.
So, what's OUR post-industrial game? I think it should be to catch up our spiritual, mental and social technologies to the level of our machine technologies. Do we want to resolve these age-old patterns of growth and decline, or not? If we do, the question becomes: After the bulk of the manufacturing is done, what do we do next?