The manufacturing sector is contracting. Analysts blame Trump's trade war.
New poll indicates that a large number of Americans not only support President Donald Trump's persecution, but that he was removed from office . Meanwhile, in the midst of a rapidly expanding abuse of power scandal, Trump's approval rating is to hit all time lows .
But arguably, the most disturbing investigation for Trump has nothing to do with impeachment or his approval rating. [19659003] The latest figures from the Institute for Supply Management (ISM) carefully monitored the survey of the country's manufacturing companies (PMI), not only shows that production activity has fallen for two consecutive months, but that August was the lowest point for the sector since June 2009 ̵[ads1]1; a time when the economy was rooted in the Great Recession.
Very nasty #ISM production of 47.8 – lowest since 2009. New orders, production, import, export and employment are all contracting. Not very surprising considering the global production outlook. Make sure it is a coincident indicator and does not track GDP growth so well. pic.twitter.com/5zFNdyfsTs
– Christopher Nicolas Dembik (@Dembik_Chris) October 1, 2019
As Vox's Emily Stewart has explained, the recession has not just occurred – something must happen that triggers them. But concerns about an economic downturn are never welcome for a president heading into an election year. That's especially true of Trump, who has trumpeted his ability to revive American production. And perhaps even worse for Trump is the fact that analysts are blaming the slide mostly at the feet of his trade war. From Investors Business Daily:
The ISM index unexpectedly plunged deeper, leaving the weakest US reading since the end of the recent recession as a global downturn and the US and China trade wars increasingly weighing the sector. 19659008] The Institute of Supply Management's factory index dropped to 47.8 in September, the lowest since June 2009, according to data Tuesday [any number below 50 generally signifies contraction]. The figure missed all estimates in a Bloomberg survey that had asked for an increase from August 49.1.
"We have now embarked on a production recession in the United States and globally," Peter Boockvar, chief of investment at Bleakley Advisory Group, told CNBC, citing Trump's customs-heavy trade policy.
"There is no end to this decline, the recession risk is real," added Torsten Slok, chief economist at Deutsche Bank, in a note on ISM figures quoted in CNBC's piece.
In another bad omen, following the release of the ISM number, Dow fell by nearly 300 points on Tuesday.
Trump has come back to produce a centerpiece of his political identity
Both during the 2016 campaign and since his inauguration Trump put a lot of political capital into reviving the US manufacturing sector.
In fact, just over two years ago, Trump boasted a high number in the same production index that now flashes warning signs.
Manufacturing Index rose to 59%, the highest level since the beginning of 2011 – and we can do much better!
– Donald J. Trump (@realDonaldTrump) September 3, 2017
And in fact, while job growth overall during Trump's first two and a half years in office is significantly behind Obama, Trump's record in The manufacturing sector has really been impressive. As of July, the industry increased more than 300,000 jobs over Obama's pace during the first 30 months of Trump's presidency compared to the last 30 months of the Obama administration. But as Investors Business Daily notes, recent ISM figures suggest not only that profits are being reversed, but that more bad news is on the horizon.
[The ISM] The employment measure fell to its lowest since January 2016. That's a worrying sign before a job reports Friday that are expected to show private wage growth are still dampened.
Trump responded to ISM numbers on Tuesday by ejecting one of his favorite abusive targets: Federal Reserve leader Jerome Powell.
As I predicted, Jay Powell and the Federal Reserve have allowed dollars to become so strong, especially compared to ALL other currencies, that our producers are adversely affected. Bold Rate Too High. They are their own worst enemies, they have no clue. Pathetic!
– Donald J. Trump (@realDonaldTrump) October 1, 2019
But there is only so much the Federal Reserve can do to spur growth in the midst of a world economy that feels the strain of Trump's trade war – one that does not only harms China, but which has a ripple effect in large economies that deal much with China, such as Germany.
The Street reports that US figures follow "similarly weak readings in Europe and China for the month of September," and came on the heels of a World Trade Organization warning on slowing growth released earlier Tuesday citing "trade conflicts" and the role they played plays in "increase [usikkerhet[ing]].
To be clear, none of this guarantees that we are entering a recession. But if US production continues to contract, this would not bode well for Trump in the near term and heading into 2020.
One of Trump's central arguments for anti-impeachment is that it would be ridiculous to admit a president who does as good a job of managing the economy as he does.
How Are you hiring a president who has helped create perhaps the largest economy in our country's history? The best unemployment rate of all time, especially for blacks, Latin Americans, Asians and women. ag than ever before .. Rebuilt Military & Choice for Vets …
– Donald J. Trump (@realDonaldTrump) September 13, 2019
While Trump insists on taking full credit for an improvement as in the reality began and continued throughout the predecessor. and he has inherited a healthy economy, low unemployment and a strong stock market, so far he has not managed to pull the approval rating over the low 40s. The latest production numbers indicate that if he is not impeached and removed from office before then, Trump's financial record could go from being a strength to a weakness for him by November 2020.
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