Four American warships off the coast of Syria with the news media reporting we are considering air strikes on selected targets within Syria as well. This is not a good situation for several reasons: why are we telegraphing what we plan on doing and when? The world needs to respond forcefully to Assad’s repeated use of chemical weapons on his own people, most certainly, but not only the United States. The Dow is down 162 points on the news today. (Monday 8/26)
No one has stepped forward to condemn Assad’s actions and join us to give him a stern warning of disapproval. The president has painted himself into a corner with his “if you cross that red line” statement and he feels he must act to save face. But the American people would like some answers; what is the strategy? What is the objective? What is the upside for the United States? What are the possible downsides for the United States?
The report on Durable Goods Orders for July was released on Monday.
A synopsis by Dr. Ken Mayland, Economic Consultant for the PMPA (Precision Machined Products Association) offers his take:
Durable goods orders plummeted 7.3% for July (sequentially). Shipments for July edged 0.3% lower. In context, these orders soared 3.9% in June and 5.5% in May. Observers of this data can make a good educated guess that the aircraft industry has much to do with these outsized ups and downs. Non-defense aircraft orders leapt 67.6% higher in May and 33.8% in June. Defense aircraft orders expanded 4.8% in May and 21.8% in June. Along comes July: commercial aircraft orders nosedive 52.3% and defense aircraft orders slid 2.2%. So there you have it.”
Industrial orders for July were flat to down and as a view into future industrial activity, they are no disaster, but are definitely on the soft side.”
Manufacturing is running lean. Inventories increased just 0.2% in June after dipping 0.1% in May. These are in dollar terms, not inflation adjusted. So production devoted to restocking will be a positive force for the economy for a number of months.”
The American Iron & Steel Institute (AISI) reports
US raw steel production slipped 0.9% last week as mills operated at an average capability utilization rate (ACUR) of 77.7 percent. In the corresponding week last year mills operated at an ACUR of 76.3 percent. Thus far this year mills have operated at an ACUR of 77.1 percent, down from the same period last year when the mills operated at an ACUR of 77.8 percent.
Real gross domestic product reported 8/29/13
The output of goods and services produced by labor and property located in the United States-increased at an annual rate of 2.5 percent in the 2nd quarter of 2013 (from the first to the second quarter), according to the SECOND estimate released by the Bureau of Economic Analysis (BEA). In the 1st quarter, real GDP increased 1.1 percent. The first estimate for the second quarter pegged growth at 1.7 percent. Today’s estimate (there will be one more revision) is based on more complete source data than were available in the “advance” or first estimate issued last month.
The Precision Machined Products Association Report on Business Trends for July 2013
Released this week, the index came in identical to last year’s reading for July and down 4 points month to month, closely following last year’s 6 point drop from June to July. The industry’s sales performance remains consistent with last year’s pattern.
We are concerned at the apparent lack of substantial growth. Our industry’s lack of sales growth so far in 2013 suggests all of our customers are in a holding pattern, and media reports of “recovery” in manufacturing really mean, at best, that manufacturing is stable.”
In its manufacturing report on business for the month of July:
Economic activity in the manufacturing sector expanded in July for the second consecutive month and the overall economy grew for the 50th consecutive month.”
Say the nations supply executives in this latest report. This is encouraging news. The PMI registered 55.4 percent, an increase of 4.5 percentage points from June’s reading of 50.9 percent.
As we head into this Labor Day weekend we find ourselves in a precarious position on the world stage. My hope and prayer is that clear heads will prevail and conflict will be avoided but I am not overly confident. There are many idiots in positions of great power.
I wish you a holiday weekend of peace and relaxation
God bless America