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Expand chart
Data: Caixin, Institute of Supply Management; Chart: Axios Visuals

The manufacturing sectors of the U.S. and China are moving in opposite directions, and data released Monday shows the gap is widening.

On one side: China's Caixin purchasing managers' index, a private survey of the country’s manufacturing activity, had its strongest reading since February 2018. The improvement was driven largely by increased domestic demand, which has picked up as foreign sales continue to sink because of the trade war.

  • "The Chinese government’s stimulus measures, although relatively modest so far, are helping to buffer China’s industrial sector," Eswar Prasad, a senior fellow at the Brookings Institution and former head of the IMF’s China Division, tells Axios in an email.
  • "The notion that China’s economy faced a drastic slowdown was a bit overblown. They have been facing a steady gradual slowdown that they are not uncomfortable with as growth around 6 percent is a more sustainable rate, now that they are a $13 trillion economy."

On the other side: The Chicago Business Barometer, which tracks Midwestern business activity steered mainly by trade and manufacturing, fell back into contraction in September. A measure of business confidence within the index dropped to its lowest level since 2009.

  • The unexpected weakness "indicates strain in 'real economy' sectors like manufacturing that drive nationwide consumer spending," the Wall Street Journal notes.
  • "The combined gross domestic product for states in the Great Lakes and Plains regions, as defined by the U.S. Bureau of Economic Analysis, account for almost one-fifth of U.S. GDP. Pain in the Midwest will quickly ripple outward."

Of note: Looking at the chart, 50 is the level separating expansion from contraction.

What's next: Today, the Institute for Supply Management will publish its monthly U.S. manufacturing survey, which declined in August for the first time in 3 years.

Go deeper: China's rust belt

Go deeper

9 mins ago - World

Biden to warn Putin U.S. will add troops in Eastern Europe if Russia invades Ukraine

Putin meets Biden in Geneva. Photo: Peter Klaunzer - Pool/Keystone via Getty

President Biden will warn Russian President Vladimir Putin when they speak on Tuesday that if Russia invades Ukraine, the U.S. is prepared to increase its troop presence, capabilities and military exercises on NATO's "eastern flank," a senior administration official told reporters.

Why it matters: The administration believes it's increasingly likely that Putin will order an invasion.

42 mins ago - World

U.S. announces diplomatic boycott of Beijing Winter Olympics

An Olympic-themed sculpture in Beijing on Dec. 1. Photo: Hou Yu/China News Service via Getty Images

The U.S. announced Monday that it will not send officials to the 2022 Beijing Winter Olympics in protest of human rights abuses committed by the Chinese Communist Party.

Why it matters: The diplomatic boycott — which won't prevent American athletes from competing — marks a major escalation between the U.S. and China amid already heightened tensions over the CCP's treatment of Muslim minorities, military threats to Taiwan and economic tariffs.

Stuck jet stream brings blowtorch December in Lower 48, frigid Alaska

Short-term climate outlook for Dec. 13-19, 2021, from the Climate Prediction Center at NOAA. (NOAA/CPC)

The Lower 48 states have seen record-shattering warmth so far this December, with temperatures running as high as 35°F above average for this time of year. The warmth has been so pronounced that during the weekend, brush fires broke out in a snowless, unusually mild Denver metro area.

The big picture: The jet stream, which is a river of air that rides at about 30,000 feet along the temperature contrast between air masses, steering storms as it goes, has been stuck in a position well north of the continental U.S., keeping storms and cold weather at bay.

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