The numbers are in for the January manufacturing reports and they are signaling that the economy is in it’s 12th consecutive month of contraction; stocks and exchange traded funds (ETFs) are mixed on the news.
The Institute for Supply Management is a private measure of the manufacturing sector that monitors the sectors health by a reading, with a number above 50 considered healthy and anything below indicating a contraction, or shrinkage. As of Monday, the index rose to 35.6 in January from an upwardly revised 32.9 in December. The January reading was above the 32.6 that economists expected, reports Marcy Gordon for Associated Press.
Meanwhile, consumer spending has fallen, as concerned households shore up and begin to save rather than spend in response to the increasing layoffs, and falling home values. The drop off in consumer spending is contributing to the weak economic picture, and economists do not expect a turn around in spending habits anytime soon, reports Martin Crutsinger for Associated Press. According to the Commerce Department, consumer spending was down by 1%.
This is the sixth consecutive month that U.S. consumers have cut their spending, a direct reflection of their shrinking incomes, reports Reuters. Analysts polled by Reuters had forecast spending falling by 0.9% and incomes slipping 0.4%.
The strike brewing within the U.S. oil refinery employees was put on hold, yet oil prices continued to slide this morning. Dirk Lammers for Associated Press reports that oil fell to $40.79 a barrel. Twenty-four thousand refinery workers agreed to postpone their strike despite the labor negotiations contracts still up in the air. The United Steel workers agreed to a rolling 24-hour extension of talks.A strike would impact 60 refineries, with the largest Valero Energy Corp. claiming they would shut down some of their refineries if their laborers walked.
As of Monday, the Obama administration said they stand firm on dealing with Wall Street bonuses and executive compensation, while the new measures to aid financial services would not be unveiled this week. The new President wants to see this debt written down, and will not pre-empt any announcement next week, reports Associated Press. This weekend the topics of discussion included new rules on executive pay and lending transparency for institutions receiving funding under the TARP program.
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