The manufacturing sector in every country represents the most significant part of its GDP income. However, in the USA manufacturing sector is getting slowed down and some even think that it’s gone into recession. A recent report from Feds shows the poor performance of US manufacturing sector and various reasons behind it. The production went down by 1.2% for June right after this sector saw a 1.9% decline in the previous three months. Quarterly report shows manufacturing went down at 2.2% and the same thing happened in the last quarter also. Because of various geopolitical situations like trade war, the overall manufacturing sector is not performing well.
The report also shows poor performance of the industrial sector, which managed to grow at a flat rate and has beaten economists prediction of .01%. Another critical data which Feds report shows is about production capacity. The capacity has gone down to 77.9% in June from 78.1% in the previous month. Mining is also facing the same problem of slow economic growth, plus it’s getting worse, according to economists. The index of consumer goods remained the same, and there was a slight improvement in the construction index.
Now experts are saying that the current trade war is the primary reason behind this slowdown. China’s economy has slowed down a lot, and in quarterly performance, China revealed that many significant sectors in there are also not performing well. The trade deal which is supposed to happen in between the two countries is not happening, making things worse for the US economy. Feds chairman Jeremy Powel said that weak factory results are the reason why they are cutting interest rates. Feds is expected to reduce interest rates in upcoming general meeting to support sinking manufacturing and other sectors.