newjerseynewsroom.com

BY GINA G. SCALA

NEWJERSEYNEWROOM.COM

Even when Americans aren’t buying, American companies are still producing, except for June when manufacturing fell for the first time in three years.

"Clearly this is the biggest sign yet that the U.S. is catching the slowdown that is well under way in Europe and China," said Paul Dales, senior U.S. economist at Capital Economics in London, according to Reuters.

Manufacturing was expected to fall to 52.0, down from 53.5 for the month of May, according to Reuters. The Institute of Supply Management reported Monday the index of national factory activity fell below the 50 mark, which separates expansion from contraction, landing at 49.7.

The last time the national manufacturing industry saw a 12 point drop was in October 2001, one month after the Sept. 11 terrorist attacks in New York, Pennsylvania and Washington, D.C. More than half of the manufacturing industries reported a decline, while just seven reported growth, according to Market Watch. Also taking a fall were the new orders sector, which dropped nearly 13 full points to 47.8, from 60.1 in May, a 13-month high, Fox Business reported.

In an interview with Fox Business, John Ryding, chief economist at RDQ Economics, acknowledged new orders “fell back to earth with a really big clunk.” However, he also said it remains unclear whether June’s decreased figures signal bigger trouble.

Adolfo Laurenti, senior economist at Mesirow Financial, told Fox Business he believes a recession is now 25 percent likely. Earlier, the likelihood was 15 percent.

“Investors have to begin, at a minimum, considering the possibility” that the U.S. could succumb to a double-dip recession in the second half of the year, Dan Greenhaus, chief global strategist at BTIG, said.

The United States now joins a growing list of countries with decreased manufacturing output, including Brazil, the U.K., Australia, New Zealand and South Africa, not to mention most of the eurozone, such as France, Germany, Spain and the Netherlands.