Big miss in June manufacturing: Orders down 0.5%, shipments down 1.1%

posted at 1:56 pm on August 2, 2012 by Ed Morrissey

Remember that initial estimate from Commerce of 1.5% annualized GDP growth rate for the second quarter?  Expect a significant revision in the wrong direction later this month.  The manufacturing sector declined in both orders and shipments in June, especially in the latter:

New orders for manufactured goods in June, down three of the last four months, decreased $2.1 billion or 0.5 percent to $465.8 billion, the U.S. Census Bureau reported today.  This followed a 0.5 percent May increase.  Excluding transportation, new orders decreased 1.8 percent.  Shipments, down two of the last three months, decreased $5.3 billion or 1.1 percent to $469.9 billion.  This followed a 0.3 percent May increase.  Unfilled orders, up following two consecutive monthly decreases, increased $3.4 billion or 0.3 percent to $988.1 billion.  This followed a slight May decrease.  The unfilled orders-to-shipments ratio was 6.27, up from 6.24 in May.  Inventories, also up following two consecutive monthly decreases, increased $0.4 billion or 0.1 percent to $605.4 billion.  The inventories-to-shipments ratio was 1.29, up from 1.27.

The big hit came on non-durable goods, orders for which dropped 2.0% in June.  Durable goods orders slightly declined by 0.1%, but transportation equipment took a big hit, with a 1.1% decline.  Inventories increased thanks to the falling orders and shipments, especially for durable goods (0.4%).  This is third month out of the last four showing a decline in demand and production.

Reuters breaks out the “U” word, and warns that this looks bad for any meaningful growth for the rest of the year:

New orders for U.S. factory goods unexpectedly fell in June, a fresh sign that the slowdown in the country’s manufacturing sector likely would stretch into the second half of the year. …

The trend in U.S. manufacturing has appeared softer and has added to concerns the economic recovery is losing steam. The decline in new orders in June likely means softer output down the road, which could weigh on economic growth.

Thursday’s report showed broad weakness across industries making everything from machinery and appliances to cars and electronics. New machinery orders dropped 2.1 percent and orders for motor vehicles and parts gave up 0.7.

The overall decline was tempered by a 14.2-percent increase in new orders for civilian aircraft. Outside transportation, orders were down 1.8 percent.

The warning is almost certainly correct, although it might be amusing to see whether Reuters uses a form of “unexpectedly” if its pessimistic prediction turns out to be true.  We are seeing significant slowing now, more than the initial Q2 estimate of 1.5% indicated.  Demand appears to be declining across the board, with the exception of civilian aircraft last month, and that suggests that we’re approaching a stall or worse in the US economy.  That will be bad news for Barack Obama’s re-election prospects, and Jim Pethokoukis notes that the economic numbers already were predicting a loss:

Political scientist Douglas Hibbs looks at two factors when forecasting presidential elections: a) per capita real disposable personal income over the incumbent president’s term, and b) cumulative U.S. military fatalities in overseas conflicts.

And he’s predicting a near-landslide win for Mitt Romney over Barack Obama, with Obama losing by about as big a margin in 2012 as he won back in 2008. Under Hibbs Bread and Peace model, Romney wins 52.5% to Obama’s 47.5%.

If the growth rate gets closer to zero — or surpasses it — Obama may be lucky to get Jimmy Carter numbers in November.


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New orders for manufactured goods in June, down three of the last four months

Didn’t build that.

forest on August 2, 2012 at 1:59 PM

The private sector is doing fine

tom daschle concerned on August 2, 2012 at 2:00 PM

The statistics division of the Department of Labor is headed by a hard core left wing loon. the statistics have been suspect for the entire Obama presidency, with bizarre and unprecedented ‘adjustments’ throughout. Expect more.

pat on August 2, 2012 at 2:00 PM

When Obama said his plan worked, he meant the plan to get billions of tax dollars into the hands of his campaign donors.

itsnotaboutme on August 2, 2012 at 2:01 PM

..one wonders if the initial July BLS jobs numbers will be “rigged” as well?

The War Planner on August 2, 2012 at 2:01 PM

It’s all over but the fraud and arson

phreshone on August 2, 2012 at 2:02 PM

If the growth rate gets closer to zero — or surpasses it — Obama may be lucky to get Jimmy Carter numbers in November.

the choomer will most certainly lose the popular vote…it’s the electoral college that has me worried.

RedInMD on August 2, 2012 at 2:02 PM

I think that after a certain amount, you’ve made enough money.

Its better if we spread the wealth around.

Capital gains tax increases are done for economic justice.

You communist president.

Thanks 52%’ers!

tom daschle concerned on August 2, 2012 at 2:04 PM

…our plan worked!

KOOLAID2 on August 2, 2012 at 2:08 PM

If the growth rate gets closer to zero — or surpasses it — Obama may be lucky to get Jimmy Carter numbers in November.

It worked!

Curtiss on August 2, 2012 at 2:09 PM

You “racists”, stop being so giddy.

One was invoked by President Obama last month when he told small business owners, “Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.” In other words, government spending on infrastructure facilitates individual success.

I can never read this enough. It is so dumb and mind-numbing, and so schadenfreudig that he said it, that I can hardly contain my ‘joy’.

Schadenfreude on August 2, 2012 at 2:10 PM

I think he won’t win this election. Romney will be more aggresive after Labor Day.

Oil Can on August 2, 2012 at 2:11 PM

…our plan worked!

KOOLAID2 on August 2, 2012 at 2:08 PM

You know, no matter how hard I try, someone always beats me to the snark.

Curtiss on August 2, 2012 at 2:11 PM

Ed is using baseball metaphors as a coy rebuttal to the WH pic of Mom Jeans, Starting Pitcher, wielding his bat like he’s getting ready to step up to the plate.

ted c on August 2, 2012 at 2:12 PM

Well done, 52%.

Dr. Carlo Lombardi on August 2, 2012 at 2:12 PM

When the history of 2012 will be objectively written, mark these two down as game-changers:

1. “You didn’t build that

2. Rahm and his compadre ruined it for Obama. Send them thank you notes.

However, don’t take anything for granted until the night of Nov. 6. If yesterday was any indication the silent majority is more dedicated than ever to clean house.

Schadenfreude on August 2, 2012 at 2:13 PM

I still don’t understand in what world winning by 5% (regardless of party) is considered a “landslide.” In my world that’s “eeking out a victory.”

WitchDoctor on August 2, 2012 at 2:14 PM

From the Washington Examiner-

Two years ago today, under the header, “Welcome to the Recovery,” Treasury Secretary Tim Geithner wrote in The New York Times:

While the economy has a long way to go before reaching its full potential, last week’s data on economic growth show that large parts of the private sector continue to strengthen.

So how’s that recovery going Timmy?

Happy Nomad on August 2, 2012 at 2:15 PM

Picture of the Year

Schadenfreude on August 2, 2012 at 2:16 PM

I still don’t understand in what world winning by 5% (regardless of party) is considered a “landslide.” In my world that’s “eeking out a victory.”

WitchDoctor on August 2, 2012 at 2:14 PM

a 5% margin of victory may translate into a helluva lot of electoral college votes, thus….a landslide. (cue Stevie Nicks).

ted c on August 2, 2012 at 2:17 PM

…our plan worked!

KOOLAID2 on August 2, 2012 at 2:08 PM

You know, no matter how hard I try, someone always beats me to the snark.

Curtiss on August 2, 2012 at 2:11 PM

Your plan worked. Koolaid didn’t build that. Your snark is doing fine.

forest on August 2, 2012 at 2:17 PM

But O’Butthead is winning all the swing states, don’tcha know?

ICanSeeNovFromMyHouse on August 2, 2012 at 2:18 PM

I’m to be frank, as this at a quick glance is not hitting me as anything major; ok, lets see what the jobs report is tomorrow, but, regardless, the short-term economy is working out at this point to be a neutral. All of us have to reduce the amount of harping on the short-term economy. We have bigger fish to fry.
Like the Chick-Fil-A thing is going to get more votes than the economy now among critical independents. We don’t always understand how intense the opposition is to the gay militancy. Look what happened yesterday, it was similar to the tea party gatherings. It felt like that. Lots of independents, even blacks, will cross over and vote for us based on Romney taking a strong (NOT lackadaisical) stand against the gay militants’ intolerance. And drive donations $$$ based on Chick-Fil-A issue. Go where the intensity of feeling and enthusiasm is… and it’s not the economy.

anotherJoe on August 2, 2012 at 2:22 PM

But O’Butthead is winning all the swing states, don’tcha know?

ICanSeeNovFromMyHouse on August 2, 2012 at 2:18 PM

And Saddam Hussien won his last election by nearly 100%, there are no homosexuals in Iran, and that North Korean weightlifter really got his extra strength from channeling Kim Jung Il.

If Obama was really winning in the swing states by significant margins the local politicians wouldn’t be running for the hills when he campaigns there.

Happy Nomad on August 2, 2012 at 2:23 PM

So, who is he blaming for this, Peter Pan, the Tooth Fairy, or, are we back with George W. Bush?

rplat on August 2, 2012 at 2:23 PM

http://finance.yahoo.com/blogs/breakout/ignore-jobs-report-just-guess-charles-biderman-170716035.html

Let the spin begin. Wonder how bad tomorrow’s job report is?

bayview on August 2, 2012 at 2:23 PM

Whatever.

and now, the NEWS: Did you hear about “RICH” Ann Romney’s expensive HORSE hobby?

Pork-Chop on August 2, 2012 at 2:24 PM

I won.

hillbillyjim on August 2, 2012 at 2:25 PM

Wait until the first post-Obamacare numbers start coming in… Then it’s gonna get real ugly.

JimK on August 2, 2012 at 2:26 PM

Get ready for some serious Mormon-bashing.

And if you can figure out some way to profit from a blanket forgiveness of student loans and federal de-criminalization of marijuana laws some time in October, you’ll make a killing.

MidniteRambler on August 2, 2012 at 2:27 PM

The long road to the bottom…

PatriotRider on August 2, 2012 at 2:27 PM

Too bad this isn’t an election year…

Seven Percent Solution on August 2, 2012 at 2:28 PM

How much would you be willing to bet that when the “Mittster” wins in November and repeals Obamacare, starts to cut regulations, opens up areas for drilling for oil, makes the conducting of business easier and with less government interference and these numbers show rapid improvement, the Lamestream media will say he is only building on Obama’s foundation? I’ll need a receptacle to “ralph” into when I read that headline, but I’ll bet all that I own!

Deano1952 on August 2, 2012 at 2:28 PM

Tomorrow morning’s numbers will be interesting…

PatriotRider on August 2, 2012 at 2:29 PM

Picture of the Year

Schadenfreude on August 2, 2012 at 2:16 PM

Priceless!!

Scrumpy on August 2, 2012 at 2:31 PM

one wonders if the initial July BLS jobs numbers will be “rigged” as well?

The War Planner on August 2, 2012 at 2:01 PM

That’s “assuming” we have any Growth to be able to
manipulate those numbers….

As Ron White would say “I WAS WRONG”

ToddPA on August 2, 2012 at 2:32 PM

If Obama were an honorable man, he’d throw in the towel on the election, replace that silly idiot Biden with Romney as his Veep right away, and then resign to go play golf full time. America needs competence right now, and the world needs America to succeed right now. This really can’t wait.

Alright, I’m back awake now…but, hey!, a guy can dream can’t he?

MTF on August 2, 2012 at 2:32 PM

Race card…
Mormon card…
Class warfare card…
Start a new war card…
Have not paid your fair share card…

He’s slowly building a full deck of cards…

PatriotRider on August 2, 2012 at 2:33 PM

Troll free.

Hmmm Hmmm Hmmm

JPeterman on August 2, 2012 at 2:33 PM

Whatever.

and now, the NEWS: Did you hear about “RICH” Ann Romney’s expensive HORSE hobby?

Pork-Chop on August 2, 2012 at 2:24 PM

I did! It was just fascinating- and luckily they were able to go piece through piece of what Ann was wearing while she watched said horse practice! Wouldn’t it be interesting to know what the outgoing First Lady has spent on all of HER clothes? It’s only right, given that we bought them.

BettyRuth on August 2, 2012 at 2:34 PM

So how’s that recovery going Timmy?

Happy Nomad on August 2, 2012 at 2:15 PM

About as well as his ability to master the ins and outs of Turbo Tax.

chemman on August 2, 2012 at 2:34 PM

Ed is using baseball metaphors as a coy rebuttal to the WH pic of Mom Jeans, Starting Pitcher, wielding his bat like he’s getting ready to step up to the plate.

ted c on August 2, 2012 at 2:12 PM

Not to ‘step up to the plate’, it’s more like Al Capone at the dinner table with his capos.

slickwillie2001 on August 2, 2012 at 2:37 PM

MidniteRambler on August 2, 2012 at 2:27 PM

They will be so hyped they will be chooming to their hearts delight and forget to vote. Works for me.

chemman on August 2, 2012 at 2:38 PM

let’s see

unemployed rising
manufacturing down

order up some Chick-fil-a

audiotom on August 2, 2012 at 2:39 PM

You gotta love the constant “revisions”…

Here’s how it works. Say there is a report of the numbers of widgets produced in Upper Slobavia each month. This number is reported in a greatly anticipated and reported government press release.

There are five numbers: Actual Number of Widgets, Initial Reported Number, Revised Number, and the percentage change between for both the actual and repevised numbers.

Say, the number of widgets produced is decreasing at a steady rate, from 1000 in January to 980 in February to 960 in March to 940 in April and so on. That would mean there is a 2% decrease in widget production each month, which looks bad in the newspapers.

So, say on March 1, they report that 1020 were produced in February. This gets reported, with much fanfare, as a 2% increase for the month. The problem is, when April 1 rolls around, and the actual number is 960, this would mean they have to report a 4% decrease for February, which looks even worse in the newspapers.

So on March 8, the figure is quietly revised to something like the actual figure of 980. Then when April 1 comes, the actual figure can reported a7 960, which would be a reletively modest 2% decrease from the revised figure, and the loss in February is effectively papered over without the piper ever needing to be paid.

Of course, this works so well once, it is awfully tempting to do the same thing for the March numbers, so they will initially be reported as 980, to be revised on April 8 down to 960, and so on. So the actual production is falling, 2% a month, but the initial reports show no decrease at all.

Lather. Rinse. Repeat.

This is why in the past 57 months, the number of jobless claims has been under-reported, requiring an upward revision, 56 times.

Haiku Guy on August 2, 2012 at 2:43 PM

Next up: Mitt is a tax-dodging ax murderer. Maybe that will distract the rabble from these hideous economic numbers.

Philly on August 2, 2012 at 2:46 PM

Wouldn’t it be interesting to know what the outgoing First Lady has spent on all of HER clothes? It’s only right, given that we bought them.

BettyRuth on August 2, 2012 at 2:34 PM

So true. It will be nice to have a real LADY as First Lady again. I really like Ann Romney.

Pork-Chop on August 2, 2012 at 2:51 PM

It’s all over but the fraud and arson

phreshone on August 2, 2012 at 2:02 PM

Very funny but also very frightening.

jnelchef on August 2, 2012 at 2:59 PM

Not to ‘step up to the plate’, it’s more like Al Capone at the dinner table with his capos.

slickwillie2001 on August 2, 2012 at 2:37 PM

“Enthusiasms”

JPeterman on August 2, 2012 at 3:00 PM

easy to see coming. but that’s ok because now tha gas proces have fallen things should pick up….oh wait….

Gas Prices Post Rare, Steep Rise in July.

If it seems like the price of gasoline is rising quickly and at an odd time of year, that is because it is true. The average price of a gallon of regular gas in the U.S. rose 5.1% or 17 cents to $3.50 per gallon today according to auto and travel group AAA.

This marks the first monthly increase since March and the largest July increase in at least a dozen years. The average price of gas in July was $3.42 a gallon. This was the third-highest average price for July ever recorded. AAA began keeping the fuel-price data in 2000.

“Drivers nationwide saw prices reverse in July after three months of steady declines at the pump,” said AAA spokesperson Avery Ash

– wall street jounal

well that’s ok because with all the money consumers will save on food bills this year i’m sure the economy is going to bounce right back up….oh wait….

….Half of US counties now considered disaster areas

ST. LOUIS (AP) — Nearly 220 counties in a dozen drought-stricken states were added Wednesday to the U.S. government’s list of natural disaster areas as the nation’s agriculture chief unveiled new help for frustrated, cash-strapped farmers and ranchers grappling with extreme dryness and heat.

The U.S. Department of Agriculture’s addition of the 218 counties means that more than half of all U.S. counties — 1,584 in 32 states — have been designated primary disaster areas this growing season, the vast majority of them mired in a drought that’s considered the worst in decades.

look maybe a politican reads these comments. This if for them:

Until you idiots in DC do something about the price of gasoline and I mean some really big stuff like get it down to $1.5/gal and you repeal that stupid wrong headed farm bill you passed last year repeal obamacare and stop burning our food for gasoline nothing is going to get better. the fed talking about pumping another $500 billion into the economy isn’t going to fix things either. It will just drive up costs. the economy needs to go into a deflationary cycle. It has needed it for 3 decades. I know deflation is “bad” but what people don’t understand is it is has much a part of the free market cycle as growth. take the damn medicine, repeal the laws limiting growth and allow the prices in industries to fall. sure many people will be impacted but until it happens the economy will never have true growth again.

unseen on August 2, 2012 at 3:04 PM

How much would you be willing to bet that when the “Mittster” wins in November and repeals Obamacare, starts to cut regulations, opens up areas for drilling for oil, makes the conducting of business easier and with less government interference and these numbers show rapid improvement, the Lamestream media will say he is only building on Obama’s foundation? I’ll need a receptacle to “ralph” into when I read that headline, but I’ll bet all that I own!

Nah, I say the opposite. I think they’ll whine and cry and squeal like little girls about how mean old Mitt is tearing down the prosperous America that Obama built on the Bush-created ash heap.

idalily on August 2, 2012 at 3:04 PM

About time for Bernanke and some QE3. Chuckle Schumer all but begged Benny in that hearing to do something, anything, to make things look better for Obama.

Dems busily mining data and files on Bernanke to “encourage” (a al Chicago way) more Fed-love for the Bamster before October. Pressure building on Benny B.

marybel on August 2, 2012 at 3:23 PM

Obama loses in a landslide – unexpectedly.

johnnybravo on August 2, 2012 at 4:56 PM

Demand appears to be declining across the board, with the exception of civilian aircraft last month, and that suggests that we’re approaching a stall or worse in the US economy.

Been there when Reagan took office. Hot damn hard times when the machinists are laid off marking the worst economic times as the civilian aerospace industry plummets next.

Romney better play hard on domestic growth, and quit pimping for Netanyahu who has no monopoly on Israel’s foreign policy, but his own agenda.

Dinner jacket repeats the premise that corruption meets its own demise. We read the same throughout the Bible. The mistranslation of Iran’s dinner jacket is propagandized by the same media that denies the God of Israel. By preferring the media mistranslation of the Mullah, we condemn the God of Israel as a liar or a misfit for having condemned Israel and/or Judah (sequentially) to destruction when failing to keep their Law according to their Prophets: Love God, love neighbor as self; do unto others as you would have done unto you. THAT fulfills all of the Law and the Prophets. “Blessed are the Peace Makers for they shall be called the children of God.” The destruction of Shiite in favor of Sunni is not America’s reason for existence, but an ill fated corruption of what “exceptionalism” constitutionally means, another corporate glut Manifest Destiny causing the genocide of every minority indigenous population in the region; whether Jew, Christian, Kurd, Bahai, Druze, many various sects of Islam, Buddhism, Hinduism and whoever else.

Unlike North Korea, Iran does not have the nuclear weaponry, and consistently insists it has no intention of developing such weapons. Forcing the show down against Syria is not helping anyone other than those who profit from warfare. The more belligerence, the more radical — and America’s presumption that we are never wrong because we’re always in the right is berserk belligerence. How quickly do the sheeple insist on being fooled again by the WMD war propaganda — think again how easily that story prompted the Iraq War which really only forced the game of corrupt musical chairs, who runs Iraq today, and how our troops must yet observe Bush’s suicidal “Karzai” Rules of Engagement that Obama “inherited”.

Look at RUSSIA AND CHINA aligned with SYRIA AND IRAN. When all is said and done, it’s better to let people determine their own destiny rather than forcing circumstances as if to deserve global domination with malice aforethought. Whoever whines that our honor has been besmirched, recall All Quiet On The Western Front. Don’t take offense unnecessarily. Build up alliances, but don’t force global war, or start a global war because you felt insulted.

Look at our nation’s leaders today. We’ve besmirched America ourselves by electing such corrupt politicians to govern us, to ruin our economy and dissolve our Constitutional Government as if DHS is some boon, as if ObamaCare will actually provide affordable health care to the taxpayers. Moat/Beam. We need to clean our own Washington DC Capitol Hill before we storm into another nation as if to clean their house, assassinating their duly elected leaders, arming mercenaries to slaughter loyalists, killing all the minorities in the name of democracy. That besmirches all the good that America ever was.

I don’t want to hear Romney talk foreign policy except to grow our domestic economy. Wars don’t just cost taxpayers our livelihood casting us further into the black hole of infernal insurmountable national debt and economic inflation or worse yet stagflation, but wars ruin the lives of the generations who, once enlisted, are perpetually redeployed until they are killed or can not heal from their wounds of war to final discharge.

Exporting war is not the point of Israel’s Law and the Prophets (Old Test) nor the purpose of Christianity. This entire “Arab Spring” of US taxes funding radical Islamism must stop. The insanity of declaring al Qaeda our international enemy and then aligning our US/NATO forces with al Qaeda to topple the Libyan nation and ruin the lives of their peoples is unforgivable. Repetition only makes things worse towards ‘the end of the world’.

Given our economic predicament, it is tantamount that we Americans focus our attention on re-establishing Constitutional Governance for ourselves with a strong national defense by cultivating our strong domestic PRODUCTIVE economy, pruning away the insidious authoritarianism within our bureaucracy, and allowing our light to shine for others to choose as they may of their own accord in trade and alliance. That is the pursuit of happiness, appreciating our natural rights as we produce through good work, with a strong national defense, intent with our Constitutional existence.

maverick muse on August 2, 2012 at 5:09 PM

JOY, JOY, JOY. someones predicting Romney will win.

GLOOM,GLOOM,GLOOM. Someones predicting Obama will win.

Oh the woe.

gerrym51 on August 2, 2012 at 5:20 PM

In a modern service-oriented economy, the old guidelines are outdated. When you see growth at or below 1.5%, it is in effect a recession. The economy isn’t growing at that rate, it is like a heavy truck going uphill with no momentum and without enough power. Sooner or later, it will stall out.

As Megan McArdle has noted, in 1930 they didn’t think they were on the verge of the Great Depression, they thought it was a market correction and corresponding recession from which we would bounce back. It wasn’t until well into the ’30s, when the second banking crisis erupted, that we realized it was a long-term slowdown.

Adjoran on August 2, 2012 at 7:09 PM