U.S. manufacturing activity contracted for the first time since the recovery began. The Manufacturing Purchasing Managers index fell an unexpected 3.8 points in June to 49.7, the lowest since July 2009. First, the good news: Manufacturers kept expanding payrolls at a solid pace. The employment index barely changed at 56.6, holding near April's 10-month high of 57.3. Now for the bad: The new orders index posted its second largest one-month decline since December 1980, tumbling 12.3 points to 47.8. Slower global economic growth is depressing U.S. factories; the new export orders index dropped 6.0 points to a three-year low of 47.5. The production index has lost 10 points since April to 51.0, the lowest since May 2009. Inflationary pressures are easing rapidly; the prices-paid index is down 24.5 points since February to 37.0.
Source: Ed Yardeni — Ed Yardeni is the president and chief investment strategist of Yardeni Research Inc., a provider of independent investment strategy and economics research for institutional investors.