On the first trading day of September some discouraging news on manufacturing in the U.S. led to some nervous movements by investors. The ISM (Institute for Supply Management) manufacturing survey fell to 49.4 in August when it was expected at 52. Any reading below 50 is a sign of contraction. The survey had shown a rise in each of the past months prior to the release of the August data, as new orders and output plummeted and factories cut jobs.
“It’s nasty. It really is a tale of two economies still. That’s the issue. The consumer is doing fine. It’s not going to determine what the Fed does. It’s a signal that we’ve already seen … that the manufacturing sector continues to struggle.”
Swonk also said she was keep a very close eye on auto sales in the month of August as a gauge of consumer spending. A decline of 3 % was expected in the auto industry last month. Wal-Mart also announced it is eliminating 7,000 positions.
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