The level of U.S. manufacturing activity fell to a three-year minimum bit
U.S. manufacturing activity in the first contraction in three years, a further blow to the confidence of the people in the global economy. At present, the global economy has been the impact of European debt crisis and economic slowdown.
Economists had expected only a mild deceleration of U.S. manufacturing activity, they shocked the U.S. Institute for Supply Management (ISM) said the investigation report of the U.S. industry activity index from 53.5 in May dropped significantly the month of 49.7, which is the lowest level since the end of the recession in the mid-2009.
The ISM index below 50 contraction activity, but higher than the 50 index expansion. Standard Chartered Bank (Standard Chartered) economist David Saimeng Si (David Semmens) describe the data “really bad”.
Before the U.S. release of the weak ISM data, the purchasing managers survey last month, China’s manufacturing expansion speed is the slowest in seven months, the euro zone manufacturing activity is still hovering at the weakest level in three years. “A large part of the weakness appears to be through the trade ‘infection’,” Deutsche Bank (Deutsche Bank), Alan Ruskin said Alan Ruskin.
Since August 2011, the euro zone manufacturing activity month on month contraction. Index in the euro zone’s largest economy Germany, June manufacturing activity in the contractile speed is the fastest since June 2009.
The ISM’s new orders sub-index by a particularly heavy blow (although the tradition of the sub-index fluctuations), may indicate a drop in demand for U.S. products overseas. “Manufacturing is particularly vulnerable against the global slowdown in economic activity,” said Merrill Lynch (Bank of America Merrill Lynch), Joshua Deng satisfied Lian (Joshua Dennerlein).
Two weeks ago, the Federal Reserve (Fed) announced the extension to “reverse operation” (Operation Twist), the sale of short-term treasury bonds to buy long-term debt in order to support the U.S. economy by pushing down long-term interest rates.
Being further signs of emerging market growth is slowing and Europe continued turmoil affect the U.S. economy may prompt the Fed to take more drastic action in the coming months, including a new round of asset purchases, the so-called “third round of quantitative easing “(QE3).
Create record levels of unemployment and the manufacturing sector remained weak in the euro zone, according to BNP Paribas (BNP Paribas) economist Ken Wattret (Ken Wattret), forecast, may force the European Central Bank (ECB) in the week late some time to cut interest rates.
The latest data, almost no evidence to challenge the point of view the ECB should cut interest rates, “he said,” The only problem is that the rate cut should be much. ”
In the UK, the Purchasing Managers’ Index (PMI) compared to many analysts had worried that better, but still shows manufacturing activity in the second consecutive month contraction. Expected the Bank of England (the Bank of England) will be announced later this week for another round of quantitative easing on the grounds that the UK and global economic weakness far beyond the Bank of England Monetary Policy Committee (MPC) in a few months before the judgment.
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