"The underlying picture for manufacturing is certainly one of weakness"
- Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.
Manufacturing in the world's biggest economy unexpectedly contracted last month after two straight months of growth, due to a significant drop in orders. The Institute for Supply Management (ISM) said its index of national factory activity tumbled to 49.5 in November, compared to 51.7 the month before, reaching the lowest level since July 2009. New orders dropped to 50.3 from 54.2, while prices paid were down to 52.5 from 55.0. The unexpected return to contraction marks reappearance of economic weakness, which was seen over the summer months.
"The underlying picture for manufacturing is certainly one of weakness," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. "Soft U.S. final demand, a need to adjust inventories, weakening exports -- all of that adds up to a weak manufacturing sector."
"We had two months of growth and now we are back to contraction that is one way. The other, which is a little more realistic is that since May the index has been very close to 50 and I think what we are seeing is that manufacturing has stalled and has yet to recover," said Christopher Low, chief economist at FTN Financial.
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