Nov 4, 2019

China's manufacturing is pushing higher while the U.S.'s is sinking

Data: Caixin, Institute for Supply Management; Chart: Andrew Witherspoon/Axios

Manufacturing industries in the U.S. and China seem to be moving in opposite directions. In October, a private company survey of China's factory activity shows it expanded for a third consecutive month, while U.S. manufacturing contracted for the third month in a row.

Why it matters: October was the largest deficit the U.S. manufacturing industry has had with China in the nearly eight-year history of the Caixin survey.

What happened: The Caixin China manufacturing index posted its highest reading since February 2017, beating economists' expectations, while the U.S. ISM manufacturing index barely edged up from its September level, which was the weakest in 10 years.

  • Caixin's survey found that the total amount of new work received by Chinese producers rose by the highest rate in about six years, prompting manufacturers to expand production. Export orders also rose by the most in five months.
  • That was likely due to the U.S. exempting hundreds of Chinese products from tariffs during the month, Caixin said in the survey.

Yes, but: Caixin's survey is mainly based on responses from 500 smaller private factories, while China's official index, which focuses on 3,000 larger manufacturers, contracted during the month.

Of note: A separate index that tracks U.S. manufacturers largely located in the American Midwest had its weakest reading in four years last month and the second lowest in a decade.

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Key manufacturing index contracts for the fourth straight month

The ISM's November manufacturing report released Monday contracted for the fourth straight month.

Why it matters: It's an unexpected decline as most industry watchers expected the reading to rise. Surveys have shown manufacturing output declining for more than a year.

Go deeperArrowUpdated Dec 2, 2019

The U.S. services sector bounces back

Data: Institute for Supply Management; Chart: Andrew Witherspoon/Axios

The U.S. services sector roared back in October, with the ISM's non-manufacturing report jumping to 54.7, up from 52.6 the month before, and beating expectations.

Why it matters: The services sector makes up almost 70% of the U.S. economy and has been consistently trending lower, following the manufacturing sector for most of this year.

Go deeperArrowNov 6, 2019

Wilbur Ross says December tariff hike likely without China breakthrough

Commcerce Secretary Wilbur Ross during a cabinet meeting on Oct. 21. Photo: Alex Wong/Getty Images

Commerce Secretary Wilbur Ross said Monday on Fox Business that time is running out for the U.S. and China to agree on a trade deal before Dec. 15, when the U.S. is set to impose an additional 15% tariff on around $156 billion worth of Chinese goods.

Why it matters: Future tariff hikes would likely further squeeze the U.S. and Chinese economies, dragging down already declining business investment in the U.S. and possibly pushing the manufacturing industry into a deeper recession.

Go deeperArrowDec 2, 2019