US manufacturing data is starting to lead the US to bad places
We've been watching the state of manufacturing in the States for many months now and it's not been pretty. For all it's faults it's been levels of "growth" that have been falling. New orders have been rising but not as much as they were, same for employment etc etc
Those can be partly brushed under the carpet while things are still "growing". What is a problem is when things start contracting
The Empire numbers show that employment, orders and the working week stayed negative. The Philly numbers also paint a picture of deeper problems
Philly Fed components
At 50.2 The ISM is in danger of heading into contraction and the rest aren't far behind, if not there already
The day to day data is not only important in seeing what's happening now, it's also important for seeing what could happen in future. After all these months of strong job gains we are now seeing these smaller employment data points turn negative. It's no surprise that the Sep NFP number said the same
If this trend continues then we are only at the start of seeing the main US employment report turning lower. The manufacturing sector may only be a small part of US GDP but the underlying signals from it will have big repercussions if they spread across the board
Watching the employment numbers from the other data points is going to be important for gauging the NFP's from here on out. The market may have been quick to brush off poor NFP's as one off's but if they turn into a trend that's going to mean big trouble
