Market Commentary

Manufacturing in the U.S.

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Yesterday the ISM manufacturing number for June came in and it fell to 51.2% from 51.7% the month before. Any number above 50 tells us that there are more companies expanding than shrinking. It usually means the economy is growing. However, this number has been falling for months. The service sector, a much bigger portion of our economy, is doing better but it too has fallen in recent months.

Most of the weakness in the ISM number for manufacturing can be traced to the trade dispute with China. It is ongoing and just yesterday President Trump added more tariffs. It would suggest we will see more weakness before we get a turnaround, and that only after a trade deal is made. I do not expect that to happen anytime soon.

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