According to CNBC, an industry survey by Markit showed that, “U.S. ‘flash’ manufacturing Purchasing Managers Index fell to 52.9 from 54.0 in May. The June reading was the lowest since last July although it stayed above 50, indicating expansion in activity.”
New claims for unemployment benefits fell only slightly and the 4-week moving average continued its upward climb started last December. According to the same article, the issue is not layoffs but a slowdown in hiring.
That makes sense. With Europe in the early stages of recession and the emerging market powerhouses of China, India and Brazil slowing down noticeably it is hard for the U.S. to show good growth. The U.S. consumer still has been told it is his duty to spend money to get the economy going but he has not seen his real income (after inflation) move up at all for quite a few years. Plus, he is getting older and thinking about how little he has saved for retirement. Add in a lot of debt and it will be hard for him to spend a lot. Add to that the reluctance of banks to refinance mortgages at lower rates for people without great credit scores.
Still, our economy is growing and that’s better than the alternative. For the near future, I still favor owning U.S. investments over foreign.