While the concerns of the manufacturers are continuously rising, manufacturing activities have shown negative trends. U.S. Manufacturing Purchasing Managers Index dropped to 52.1 from 52.8 in April, which is believed to be the lowest figure since October 2016.
The US is battling severe trade wars with China and Mexico, and increasing tariffs will not be beneficial for the U.S. consumers in the long run. The war will eventually hit the corporate sector and end consumer will have to suffer in the end.
President Trump is highly motivated to create more job opportunities in the manufacturing sector as he believes that their trading partners have been taking advantage of the country.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, says that “The sector can’t thrive when it’s being hit by new taxes at random every few weeks. This isn’t about macro, it’s about the whims of a president who understands very little about how the economy actually works.”
In general, allover behavior of the economy and performance of different sectors do not support the views of Trump. Production index recorded weakest numbers since August 2016, as it dropped from 52.3 to 51.3. ISM’s factory employment index also decreased by 11% since October 2017. Construction spending failed to impress as well, as they remained stagnant.
