Today's Institute for Supply Managment PMI survey has economists worrying that the manufacturing sector, one of the bright lights in a tepid recovery, is finally bowing to the weight of a host of factors - the Eurozone recession, slowing growth in China and other emerging economies, and a dysfunctional U.S. federal government.
"The U.S. economy is stuck in neutral, with more job creators worried about the future," says Chad Moutray, the chief economist for the National Association of Manufacturers. He urged policymakers to "act as soon as possible to address the fiscal situation to ease economic anxieties to jump start growth. Without pro-growth policies from Washington the economy will remain stuck in neutral."
Neither the U.S. economy nor the manufacturing sector will "drop into recession," predicts Daniel Meckstroth, the chief economist for the Manufacturers Alliance for Productivity and Innovation, but he is forecasting "only a relatively modest growth rate for the rest of this year and into the first half of 2013."
Meckstroth notes that manufacturers cannot "escape the limits imposed by the general economy, i.e., wage and salary growth is meager, job growth is weak and many consumers cannot get credit to spend more than they earn."
