Estimated Local New Orders: New orders - New Export Orders = +0.7 - (-0.2) = +0.9
Estimated Local Material: Inventories - Imports = -0.3 - (+0.2) = -0.5
The new orders were up because of the increment in local new orders (estimated +0.9) that ensued the increases in production and backlog of orders. The higher new order could be caused by frontloading purchases prior to the Trump's tariffs. However, the producers didn't increase their employment and inventories because of their dour outlook due to the higher tariffs. Likewise, the customers' inventories also dropped because of no stockpiling due to the uncertain economic policies.
The drop in prices was just an aberration because the new tariffs would kick in in August and it would take some time to be reflected in the inflation data.
Overall, the PMI dropped to 48 and would continue to be in the contractionary zone (below 50) because of the higher tariffs. This will mean that the US will have very limited growth in 2025.
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