The Washington Post reported today that manufacturing, which drives American prosperity and is central to economic stability, decreased considerably last month, expanding at the slowest pace in 20 months. Private job creation was extremely weak in May. Consumer spending has decreased, layoffs have increased, and home prices have decreased. The sharp increase in energy prices is also strangling economic growth. The US 10-year Treasury yields fell below 3 per cent for the first time this year, an indicator of public concern over economic health
USA Today said that, “Manufacturers in most industries reported growth in May, all said they felt squeezed by the rising costs of fuel, chemicals, metals and other inputs. High prices for oil and other commodities have also dampened consumer spending, which has led to less demand for factory goods.” The ISM manufacturing index fell from 60.4 in April to 53.5 in May. Despite the steep downward slope, a number higher than 50 reflects growth.
The Washington Post said today, “Putting it all together, the economy is still expanding, but the pace is sluggish, and it’s clearly losing momentum. Several analysts who had been relatively optimistic about growth this year have cut back their estimates in recent weeks.”
Economists’ job creation estimate for May sits at 180,000, a sharp decline from April’s 244,000. On the bright side, the unemployment rate has likely further decreased from 9.0 percent to 8.9 percent.