So much data reveals the facts of the U.S. economy.
Japanese media said signs of a slowdown in U.S. equipment investment were strengthening. As a leading indicator of equipment investment, "Core Capital Commodities (excluding Defense and Aircraft)" orders showed zero growth every two years and four months, while the equipment start-up rate dropped to the lowest level since one year and nine months. Because of the influence of Sino-US trade war, the profit of enterprises is full of uncertainty. The tendency of enterprises to hesitate to invest is reflected in economic indicators.
According to the report of Japan Economic News on August 20, "Compared with demand, it is in a state of oversupply". Sanjay Mehrotra, CEO of Metro Technologies, revealed after releasing his March - May 2019 earnings report that he was planning to cut equipment investment for the whole year of fiscal year 2020 (up to August 2020). Meguiar's main product, Semiconductor Memory, will squeeze revenue as prices fall.
Reported that orders for core capital goods in the United States slowed down significantly. In June, growth was only 0.1% year-on-year. Previously, the U.S. economy had a strong performance, which was down 0.4% in February to 3.8% in March 2017. Since then, June has recorded the lowest growth rate. Although there was a 10% high growth in mid-2018, it is likely to fall into the negative range again.
The report also points out that the equipment start-up rate (the ratio of actual output to production capacity) which shows the willingness of enterprises to invest is not optimistic. The start-up rate in July was only 77.5%, falling to its lowest level since October 2017. Compared with November 2018, it dropped by two percentage points.
Some enterprises related to electronic parts said that "we can see the business depression caused by tariffs", and plastic products related enterprises also said, "although business is still strong, but we have begun to see the impact of tariffs and trade friction on exports". Observing the July manufacturing boom index report issued by the American Supply Management Association (ISM), it is found that the voice of enterprises expressing vigilance is prominent. The July index was 51.2, a new low for about three years, and the prosperity is deteriorating.
Reported that many American companies are more cautious about the profit outlook. According to a report released in mid-August by Lufford, a research company, nearly 70% of the major U.S. companies have lowered their earnings forecasts for July-September. The number of downgraded enterprises reached 2.9 times that of the upward increase, which was 1.6 times higher than that of the same period last year.
It is reported that the production activities of enterprises are beginning to be overshadowed. The U.S. manufacturing production index fell to 106 in July, a three-month period of year-on-year decline. It was 0.4% lower than last month, with the peak at the end of 2018 declining gradually.
In addition, Mizuho Securities macro strategy analyst Jeff Ishihara focused on the number of oil and gas extraction equipment operation, pointing out that "with the trend of equipment investment linkage". This is because in the United States, investment in the energy industry has a tremendous impact on the economy, and the number of mining equipment has declined since 2019.
Reported that US President Trump announced on August 1 that he would implement the fourth round of tariff measures against China on September 1. But he later changed his attitude on August 13, announcing that the start-up time would be delayed for specific categories with high dependence on China, and the outlook was unpredictable.
According to reports, Goldman Sachs economist Jan Hatchus pointed out that "before policy uncertainty is eliminated, enterprises may reduce investment".
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