Reports Show More Weakness in Manufacturing

Reports from Chicago and New York released on Thursday illustrated a continued weakness in manufacturing, as well a continued threat of a recession.

Since the manufacturing sector is a major customer base for the trucking industry, the news of an ongoing downturn is a blow to companies that believe the economy is on the rebound.

The National Association of Purchasing Management-Chicago said Thursday that the Chicagoland Business Barometer fell in May to a seasonally adjusted 38.7 from 38.9 in April. An index below 50 signals a contracting manufacturing economy.

The Chicago Fed said its National Activity Index slid to -1.09 last month from -0.87 in March. That was the lowest reading since last July, and marked the 10th straight month the index was below zero, an indication of below-trend growth.

Also Thursday, the NAPM–NY said its Business Conditions Index fell to 275.0 in May from 276.4 in April as the slowing manufacturing sector and an increase in layoffs dented the city's economy.

And the Labor Department reported that the number of workers filing new claims for unemployment benefits jumped 8,000 to a seasonally adjusted 419,000 for the week ending May 26.

The increase was the third in a row, keeping claims at their highest level since April 28, and worrying analysts that if the labor market continues to struggle, consumers might cut spending sharply, Reuters reported.

Meanwhile, the Chicago Fed’s report said the negative monthly values in the index suggest a greater risk that the U.S. economy is in a recession. This index is made up of 85 economic indicators including production and income, unemployment and hours, personal consumption and housing starts and sales.

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