US Manufacturing Gives Us Reason to Hope

      We had some bad news the other day with the reported GDP number down to 2.2% from 3% in the last quarter of 2011. This had led to a good deal of gloom as Europe is slipping back into recession and concern US job growth may have it a ceiling for now.

       As we have seen during this recovery however, for every bad data point or piece of bad news there's usually an opposing piece of good news or data point in rebuttal. Consumer spending has continued to be there-true, it barely grew in March but at least it was still positive.

          Today we got some positive news about US manufacturing and construction spending:

        "The pace of growth in the U.S. manufacturing sector unexpectedly picked up in April, while new orders gained, according to an industry report released on Tuesday. Meanwhile, U.S. construction edged slightly higher."

         "The Institute for Supply Management said its index of national factory activity rose to 54.8 from 53.4 in March, besting expectations of 53.0. "

         "A reading below 50 indicates contraction in the manufacturing sector, while a number above 50 means expansion."

          "New orders climbed to 58.2 from 54.5, while the employment index also improved to 57.3 from 56.1."

           http://www.cnbc.com/id/47245323

           If anything may bail us out. believe it or not, it may be the US. Europe sure isn't going to lead a growth trend. China will be strong but not as strong as the last few years-they had been trying to cool their economy and now it appears it's working as the target is "only" 7.5% this year.

           The idea of "bifurcation" is treated understandably with a good deal of skepticism by many economists. However if what we saw today is in any way indicative of what we will see down the road for the US then we might have just that for the time being. Could the US at some point lift Europe out of its mire-or will they pull us down in with them? For now at least that may not be happening.