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Karim writes:

Overall, manufacturing still contracting, but at a slower rate. Rebound in orders likely due to credit supply not being as sharp a constraint as it was in Q4 and inventory drawdown. Increase in backlogs suggests production may actually stop contracting in next couple of months. But with employment basically unchanged, it seems that this relative improvement is viewed by manufacturers as unrelated to longer-term timing and scope of recovery. Anecdotes below all over the place.

Looks to me like evidence the deficit spending is doing its job of relieving fiscal drag.

  • “Some amount of havoc is about to erupt, with companies pushing for increased capacity when suppliers have taken capacity offline.” (Computer & Electronic Products)
  • “Business is actually better than plan.” (Food, Beverage & Tobacco Products)
  • “Realistically, we don’t see any of our major customers looking to place business until mid-2010 at the earliest.” (Machinery)
  • “April was flat on sales. May looking better.” (Primary Metals)
  • “Business still trending downward, but not as fast.” (Chemical Products)

May April
Prices paid 43.5 32.0

Moving up with crude prices as reluctantly anticipated.

Production 46.0 40.4

Back towards ‘nuetral’ levels for flat GDP

New orders 51.1 47.2

Orders expanding some from a low base as expected.

This is enough for GDP to muddle through at modest positive levels

Backlog of Oders 48.0 40.5


Employment 34.3 34.4

This will continue to stagnate as productivity gains will be sufficient to meet output demands

Export orders 48.0 44.0

Will move back up from depressed levels

Imports 42.5 42.0

Will move up with prices

This is good for financial markers/bad for obama vision — modest growth with continuing downward pressure on wages