Friday, May 4, 2007

Manufacturing data

This chart compares the manufacturing job sector to the over all population. Hard to make a case for the trade imbalance getting better unless that up trending red line of people slows consumption. Our manufacturing job base is obviously declining and has been since the 1980's. With China's economy growing at +10% and their cheap labor, our manufacturing base sure looks like it is going to keep going lower. Combine that with the population growth, it is hard to see how inflation isn't the main concern of the Federal Reserve. We will know more with the unemployment number today, and with the FOMC meeting next Wednesday. Rising unemployment and rising inflation is a bad combination.

This chart shows the interest rates over the past couple decades. Do rates go down to help cushion the weakness in the job sector seen later this year, or do they go up to curb inflation?

Some other surveys of data from Pricewaterhouse Coopers on the Manufacturing outlook on the economy.

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