Unexpectedly. Of course.
Manufacturing in the U.S. unexpectedly contracted for a second month in July, showing a mainstay of the economy was struggling to improve as global economies weakened.
The Institute for Supply Management’s factory index was little changed at 49.8 last month from 49.7 in June. Fifty marks the dividing line between expansion and contraction. Economists surveyed by Bloomberg News projected a reading of 50.2, according to the median estimate.
Despite all indications prior to this, they still insist this is unexpected.
Regional reports for last month indicated U.S. manufacturing was sputtering. A measure of manufacturing around Milwaukee, Wisconsin, shrank in July for the first time in three years. A gauge of Cincinnati, Ohio-area factories declined to the lowest level since October 2009. Reports from factories in Dallas and Richmond, Virginia, also showed contraction.
So why is this unexpected?
You know what else is unexpected? The depression we appear to be in (via John E.).
If you don’t want to call this epidemic of rising poverty an invisible depression, call it the golden age of unemployment. Today’s laid-off workers can collect unemployment benefits for up to 99 weeks, staying off the public’s radar as an economic distress signal. Over that time, they often lose confidence, their skills degrade, and they can slip into the ranks of America’s chronically unemployed — where they no longer will be counted in the nation’s official unemployment rate, now at 8.2%.
What are the societal effects of millions of people sidelined for so many years on end? College graduates, looking to launch careers, end up working at Starbucks. Middle-aged professionals apply to temp agencies for gigs they once considered beneath themselves. The nearly retired simply retire early. Even if we could return to full employment tomorrow, the drag of all these idled lives could affect generations.
The tragic part of all this is it’s by design.