In case you missed it - or were confused by Obama's claim that "the private sector is going fine" - U.S. manufacturing contracted last month and the threat of a double-dip recession is real. Doug Ross notes that nobody saw it coming: "U.S. manufacturing plummets "unexpectedly"; 0 of 70 analysts predicted the recession-like numbers." Zero Hedge says: "Houston, we have a contraction"
And so we have recoupling, with the ISM printing below 50 (i.e. contraction) at 49.7 for the first time since July 2009. Expectations of a 52.5 print were obviously blown away, as the final number came well below the lowest Wall Street forecast of 50.5.Why is this critical? If you're a political junkie (like me) you would have recalled a November 2011 analysis by the New York Times' Nate Silver who noted that of all the economic indicators which predict the outcome of a Presidential election, the ISM Manufacturing Index is #1. Only one incumbent ever had to face the electorate with the ISM below zero (in contraction).
Extra - Power Line: "U.S. Manufacturing shrinking again."
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