Ugly, ugly, ugly. Manufacturing and non-manufacturing.

[marmar]

Business in the Midwest Takes Worst Hit since July 2009
by Wolf Richter • December 31, 2015


Ugly, ugly, ugly. Manufacturing and non-manufacturing.

Thank God that manufacturing is just 12% of US GDP, and that it contributes only $2.1 trillion to the economy, and that only 9% of the US workforce is directly employed by it, according to the National Association of Manufacturers. So a swoon in manufacturing isn’t by itself going to crush the US economy. That’s the meme surrounding the ugly reality that has been spreading through US manufacturing.

And the Chicago Business Barometer just added another very ugly detail to the overall image, but this indicator goes far beyond manufacturing.

Caveat: Chicago is already in trouble

OK, this is just one component of the complex and vast national economic scenery, though an important one. It’s regional, and Chicago has its own set of issues, including terrible fiscal problems. Moody’s downgraded the city to junk in May 2015, based on the costs of dealing with its unfunded liabilities, and the strain they will pose on the “city’s financial operations.” Moody’s lamented that “Chicago’s tax base is highly leveraged by the debt and unfunded pension obligations of the city, as well as those of overlapping governments.”

It’s difficult to get gloomier without evoking visions of Detroit. Among the 25 largest cities in the US, Chicago has by far the largest per-capita pension debt: at $18,596 per person, it’s nearly twice that of Puerto Rico, which is now defaulting on its bonds, and New York City, the next two biggest sinners in line, and about three times that of San Francisco and Los Angeles, neither of which is a paragon of fiscal rectitude. .................(more)

http://wolfstreet.com/2015/12/31/business-in-the-midwest-takes-worst-hit-since-july-2009/

[SheilaT]

1. Manufacturing jobs have been going away for a long, long time.

It's a shame for a lot of reasons, not the least is that it was in manufacturing that the unions had their greatest strength, and with the loss of those jobs has come the loss of unions and their many protections.

[Warpy]

2. That's what happens when you kill off demand with depressed wages

I'm surprised nobody outside DU has figured this stuff out yet.

[elleng]

3. REALLY!

The fools on the Hill! (among others.)

[dixiegrrrrl]

4. For year, the US has relied on consumer spending, which accounts for 70% of the economy

Now the true picture of how bad off we are is showing.

We are broke and getting broker and cannot afford to buy non-necessities.

Zip...nada...all gone.

[Doctor_J]

5. This points out why we need universal healthcare, free education, and social security expansion

as well as a 15 minimum wage. Many of these service jobs would be tenable, and could be shared among workers, if people's necessities were provided for, like they are in civilized countries.