Business

US manufacturing sinks into recession after two quarters of declines

WASHINGTON US manufacturing sank into recession in June after two consecutive quarters of declines amid US President Donald Trump's trade wars and a slowdown in China and other trade partners.

The decline comes as the US enters its 11th year of economic recovery and despite Mr Trump's pledges to restore the US to manufacturing greatness - though services now drive three quarters of the US economy.

Manufacturing fell by a 2.2 per cent annual rate in the April-June period, and total industrial production lost 1.2 per cent, in both cases the second consecutive quarterly decline, the Federal Reserve said on Tuesday.

The retreat comes even as US consumers are sustaining their appetite for spending, pushing retail sales higher for the fourth straight month.

Manufacturing jumped 0.4 per cent compared with May, while total industrial production showed no change, according to the Federal Reserve report, confounding economists' expectations for a 0.2 per cent gain.

However, economists said that uptick was unlikely to be sustained in coming months.

"Manufacturing is enduring a mild recession, but it probably won't deepen much further," Mr Ian Shepherdson of Pantheon Macroeconomics said in an analysis.

The downturn in manufacturing is "not news; it's a consequence of China's cyclical slowdown and the trade war," he said.- AFP

BUSINESS & FINANCE