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Recession Watch: September
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Recession Watch: July
Recession Watch: June
Recession Watch: May
Recession Watch: April
Recession Watch: March
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Previous threads...
Recession Watch: September
Recession Watch: August
Recession Watch: July
Recession Watch: June
Recession Watch: May
Recession Watch: April
Recession Watch: March
Recession Watch: February
Recession Watch: January
Spoiler September :
Spoiler ISM Manufacturing Survey :
September 2009 Manufacturing ISM Report On Business®
PMI at 52.6%
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of September 2009.
New Orders and Production Growing
Employment and Inventories Contracting
Supplier Deliveries Slower
(Tempe, Arizona) Economic activity in the manufacturing sector expanded in September for the second consecutive month, and the overall economy grew for the fifth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "The manufacturing sector grew for the second consecutive month in September. While the rate of growth moderated slightly when compared to August, the recovery broadened as the number of industries reporting growth increased from 11 to 13. Both new orders and production are growing, but at a slower rate when compared to August. It appears the fundamentals for continuing recovery are still at work as inventories and sales are gaining balance. This month, we asked a special question with regard to the American Recovery and Reinvestment Act. Twelve of the 18 manufacturing industries expect to derive some benefit from the program, and 12 manufacturing industries responded that they expect their companies to see some benefit."
PERFORMANCE BY INDUSTRY
In September, 13 of the 18 manufacturing industries reported growth. The industries listed in order are: Wood Products; Paper Products; Apparel, Leather & Allied Products; Transportation Equipment; Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The four industries reporting contraction in September are: Primary Metals; Furniture & Related Products; Plastics & Rubber Products; and Machinery.
WHAT RESPONDENTS ARE SAYING ...
* "Purchasing remains a challenge as suppliers now seem to be trying to raise pricing at any sign of life in the economy." (Computer & Electronic Products)
* "Business is picking up lots of opportunities." (Primary Metals)
* "Agricultural commodities continue to weaken, with the exception of the domestic and world sugar markets." (Food, Beverage & Tobacco Products)
* "Automotive demand continues to be strong even after 'cash for clunkers.'" (Fabricated Metal Products)
* "Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)
PMI at 52.6%
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of September 2009.
New Orders and Production Growing
Employment and Inventories Contracting
Supplier Deliveries Slower
(Tempe, Arizona) Economic activity in the manufacturing sector expanded in September for the second consecutive month, and the overall economy grew for the fifth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "The manufacturing sector grew for the second consecutive month in September. While the rate of growth moderated slightly when compared to August, the recovery broadened as the number of industries reporting growth increased from 11 to 13. Both new orders and production are growing, but at a slower rate when compared to August. It appears the fundamentals for continuing recovery are still at work as inventories and sales are gaining balance. This month, we asked a special question with regard to the American Recovery and Reinvestment Act. Twelve of the 18 manufacturing industries expect to derive some benefit from the program, and 12 manufacturing industries responded that they expect their companies to see some benefit."
PERFORMANCE BY INDUSTRY
In September, 13 of the 18 manufacturing industries reported growth. The industries listed in order are: Wood Products; Paper Products; Apparel, Leather & Allied Products; Transportation Equipment; Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The four industries reporting contraction in September are: Primary Metals; Furniture & Related Products; Plastics & Rubber Products; and Machinery.
WHAT RESPONDENTS ARE SAYING ...
* "Purchasing remains a challenge as suppliers now seem to be trying to raise pricing at any sign of life in the economy." (Computer & Electronic Products)
* "Business is picking up lots of opportunities." (Primary Metals)
* "Agricultural commodities continue to weaken, with the exception of the domestic and world sugar markets." (Food, Beverage & Tobacco Products)
* "Automotive demand continues to be strong even after 'cash for clunkers.'" (Fabricated Metal Products)
* "Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)
Spoiler U3 :
THE EMPLOYMENT SITUATION -- SEPTEMBER 2009
Nonfarm payroll employment continued to decline in September (-263,000), and
the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of
Labor Statistics reported today. The largest job losses were in construction,
manufacturing, retail trade, and government.
Nonfarm payroll employment continued to decline in September (-263,000), and
the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of
Labor Statistics reported today. The largest job losses were in construction,
manufacturing, retail trade, and government.
Spoiler U6 :
September for last three years (in %):
2007 - 8.4
2008 - 11.2
2009 - 17.0
Last 12 month (in %):
2008
Oct - 12.0
Nov - 12.6
Dec - 13.5
2009
Jan - 13.9
Feb - 14.8
Mar - 15.6
Apr - 15.8
May - 16.4
Jun - 16.5
Jul - 16.3
Aug - 16.8
Sep - 17.0
Source
2007 - 8.4
2008 - 11.2
2009 - 17.0
Last 12 month (in %):
2008
Oct - 12.0
Nov - 12.6
Dec - 13.5
2009
Jan - 13.9
Feb - 14.8
Mar - 15.6
Apr - 15.8
May - 16.4
Jun - 16.5
Jul - 16.3
Aug - 16.8
Sep - 17.0
Source
Spoiler U6, Oct 2 :
Todays jobs report was weak across the board: September payrolls fell by 263,000, the unemployment rate rose to 9.8%, the underemployment rate (U-6) rose to 17.0%, and average weekly hours fell to 30.0, tying the record low set in June.
The Bureau of Labor Statistics also reported that payrolls declined by 13,000 more in July and August than it had previously estimated.
And if that werent enough, BLS also estimates the number of jobs back in March was actually 824,000 lower than previously reported (this is an estimate of the benchmark revision that BLS will make to the data early next year).
Putting these figures together, we find that the number of jobs has now declined by 1.1 million (263,000 + 13,000 + 824,000) more than we previously knew.
I have always found it frustrating that the BLS reports an estimate of the benchmark revision each October, but doesnt incorporate that revision until the following February. That means that many analysts will be using incorrect data over the next few months.
If you want to know the number of jobs lost during the recession, for example, you might think you could get that number by clicking over to the BLS and comparing the number of jobs in September 2009 to the number of jobs in December 2007. That comparison would show total job losses of 7.2 million. Based on todays estimate of the benchmark revision, however, its likely that the actual figure is more than 8.0 million.
The Bureau of Labor Statistics also reported that payrolls declined by 13,000 more in July and August than it had previously estimated.
And if that werent enough, BLS also estimates the number of jobs back in March was actually 824,000 lower than previously reported (this is an estimate of the benchmark revision that BLS will make to the data early next year).
Putting these figures together, we find that the number of jobs has now declined by 1.1 million (263,000 + 13,000 + 824,000) more than we previously knew.
I have always found it frustrating that the BLS reports an estimate of the benchmark revision each October, but doesnt incorporate that revision until the following February. That means that many analysts will be using incorrect data over the next few months.
If you want to know the number of jobs lost during the recession, for example, you might think you could get that number by clicking over to the BLS and comparing the number of jobs in September 2009 to the number of jobs in December 2007. That comparison would show total job losses of 7.2 million. Based on todays estimate of the benchmark revision, however, its likely that the actual figure is more than 8.0 million.
Spoiler Illinois following California :
10/6/09 - COMPTROLLER'S QUARTERLY REPORT
STATE FINANCES GRIM, AND GETTING WORSE
"Illinois has too many bills, not enough money to pay them as revenue dips"
Assessing the state of Illinois' fiscal situation in his quarterly report, Comptroller Dan Hynes called the situation grim, and getting worse.
"What is clear is that as bad as our budget situation has been recently, it is only getting worse," Hynes said. "We cannot pay our bills, and there is less money coming in than anticipated. The state of Illinois continues to be in a major fiscal crisis, and the situation continues to deteriorate."
Hynes said Illinois had nearly $3 billion in unpaid bills at the end of September, a record development for the first quarter of any previous fiscal year. This, despite the state having borrowed $2.25 billion in short-term loans $1 billion in May and another $1.25 billion in August which must be repaid before the end of FY2010, on June 30, 2010.
Suppliers of goods and services to the state, including health care providers and other critical social services, are waiting 61 business days to be reimbursed or about three months another record for so early in the fiscal year. At this time last year, payment delays averaged two months, or 42 business days.
"This is a crisis unmatched historically, and the downward spiral is accelerating," Hynes said. "By any quantifiable measure: the bills outstanding; the payment delays; and overall borrowing, the fiscal situation has never been worse, especially so early in the fiscal year, and there's no end in sight."
Hynes said the backlog is much more than an accounting problem.
"Real people are bearing the brunt of the state's failure to meet its basic obligations," Hynes said. "Calls to the Comptroller's payment inquiry center have jumped from more than 1,900 per week to 2,600 per week and the anger of callers has turned to real fear."
Here are some examples:
* A Chicago Meals on Wheels and nutrition center can't purchase food and is facing eviction.
* A large Lake County disabled program can't make insurance or mortgage payments.
* A Westside family services center has exhausted its lines of credit.
* A Northside women's advocacy center director is using her own money to keep operating.
* A downstate independent living center is laying off staff and cancelling programs.
* A home health care association serving the elderly can't make payroll for its already minimum wage employees who in turn can't pay their rent or mortgage payments.
Hynes identified two factors that have had a major impact on the deteriorating fiscal position: the steep decline in economy-driven revenues such as personal and corporate income taxes and sales taxes, and record lapse-period spending. Corporate income tax receipts were down 27.8 percent, sales tax receipts decreased 13.2 percent, and individual income tax receipts fell 11.7 percent in the first quarter. Meanwhile the state paid a record $3.8 billion in obligations carried over from FY2009.
"On the one hand, revenues are way down, as is typical in a recession," Hynes said. "That situation is exacerbated, however, by the fact that we are still paying last year's bills. This is a reckoning brought on by years and years of irresponsible budget practices and nothing has changed."
Hynes predicted fiscal pressures would continue well into FY2011 and warned of record and prolonged payment delays for most categories of state programs and operations, including health care and social services; grants to primary and secondary schools; payments to universities and community colleges; and, payments to local governments and public transit systems.
STATE FINANCES GRIM, AND GETTING WORSE
"Illinois has too many bills, not enough money to pay them as revenue dips"
Assessing the state of Illinois' fiscal situation in his quarterly report, Comptroller Dan Hynes called the situation grim, and getting worse.
"What is clear is that as bad as our budget situation has been recently, it is only getting worse," Hynes said. "We cannot pay our bills, and there is less money coming in than anticipated. The state of Illinois continues to be in a major fiscal crisis, and the situation continues to deteriorate."
Hynes said Illinois had nearly $3 billion in unpaid bills at the end of September, a record development for the first quarter of any previous fiscal year. This, despite the state having borrowed $2.25 billion in short-term loans $1 billion in May and another $1.25 billion in August which must be repaid before the end of FY2010, on June 30, 2010.
Suppliers of goods and services to the state, including health care providers and other critical social services, are waiting 61 business days to be reimbursed or about three months another record for so early in the fiscal year. At this time last year, payment delays averaged two months, or 42 business days.
"This is a crisis unmatched historically, and the downward spiral is accelerating," Hynes said. "By any quantifiable measure: the bills outstanding; the payment delays; and overall borrowing, the fiscal situation has never been worse, especially so early in the fiscal year, and there's no end in sight."
Hynes said the backlog is much more than an accounting problem.
"Real people are bearing the brunt of the state's failure to meet its basic obligations," Hynes said. "Calls to the Comptroller's payment inquiry center have jumped from more than 1,900 per week to 2,600 per week and the anger of callers has turned to real fear."
Here are some examples:
* A Chicago Meals on Wheels and nutrition center can't purchase food and is facing eviction.
* A large Lake County disabled program can't make insurance or mortgage payments.
* A Westside family services center has exhausted its lines of credit.
* A Northside women's advocacy center director is using her own money to keep operating.
* A downstate independent living center is laying off staff and cancelling programs.
* A home health care association serving the elderly can't make payroll for its already minimum wage employees who in turn can't pay their rent or mortgage payments.
Hynes identified two factors that have had a major impact on the deteriorating fiscal position: the steep decline in economy-driven revenues such as personal and corporate income taxes and sales taxes, and record lapse-period spending. Corporate income tax receipts were down 27.8 percent, sales tax receipts decreased 13.2 percent, and individual income tax receipts fell 11.7 percent in the first quarter. Meanwhile the state paid a record $3.8 billion in obligations carried over from FY2009.
"On the one hand, revenues are way down, as is typical in a recession," Hynes said. "That situation is exacerbated, however, by the fact that we are still paying last year's bills. This is a reckoning brought on by years and years of irresponsible budget practices and nothing has changed."
Hynes predicted fiscal pressures would continue well into FY2011 and warned of record and prolonged payment delays for most categories of state programs and operations, including health care and social services; grants to primary and secondary schools; payments to universities and community colleges; and, payments to local governments and public transit systems.
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