So, with orders, production, and exports going south, the employment index sank to 44.6, indicating declining employment in manufacturing for the first time since December 2011. But thanks to the serial and now infinite QE, the Bernanke effect has kicked in: one component actually rose to 64.1, namely commodity prices. These higher input costs are adding to the pressures that businesses face.
Optimism about the local economy for the next quarter dropped sharply, replaced by outright negativism: 42% of the purchasing managers now expect the economy to be weaker, a jump from 29% in August. Only 12% felt it would be better. Their comments were largely negative. “Business is real slow” or “slowing orders” were common themes. While there is some seasonality in this index, the fact that it dropped so sharply and, on the way down, blew past the lows of the last three years is troubling—and not only for California
Wednesday, October 3, 2012
California’s Ballyhooed Recovery? Oh Dude!
Wolf Richter lives in San Francisco and has a great blog called Testosterone Pit. He occasionally waxes on the state of CA.