Business & Technology Nexus

Dave Stephens on technology and business trends

The US Economy: Recession?

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The Purchasing managers’ index slid this month, dropping to 50.9. Here’s a graph of the last year:

Any reading below 50 many interpret as a contracting economy. The more precise interpretation is contraction in US manufacturing output.

People seem to disagree whether the US is falling into a recession, but the PMI trend sure seems to predict just that. For many businesses, a recession in the US will lead to the proverbial tightening of the corporate belt – which usually involves being more disciplined about spending. But with inflation not budging, where will savings come from? Perhaps more offshoring, combined with more urgency around initiatives designed to boost corporate efficiency.

For those who are interested, here’s the inflation story (for finished goods). We’ll get a new chapter (the March reading) quite soon. Click anywhere on the chart to get a copy of the February report:

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Written by Dave Stephens

04/3/07 5:51 PM at 5:51 pm

Posted in Opinion

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