The Fed’s Beige Book, released on Oct. 18, revealed a broad contraction in manufacturing across the United States, reflecting weaker demand and sluggish production.

Most of the Fed’s 12 districts reported declining manufacturing activity, exacerbated by difficulties in finding qualified workers and, in some cases, persistently weak sales.

The Fed’s data on the manufacturing slump was echoed by the Conference Board’s Leading Economic Index (LEI) report, released on Oct. 21, which recorded a 0.5 percent drop in September—an acceleration from August’s 0.3 percent decline. A significant factor in September’s decline was a sharp decrease in new factory orders, contributing to a 2.6 percent decrease in the index over the past six months.

The LEI, which is designed to forecast economic turning points, points to weak economic growth heading into 2025.

“Weakness in factory new orders continued to be a major drag on the US LEI in September as the global manufacturing slump persists,” Justyna Zabinska-La Monica, a senior manager at the Conference Board, said in a statement. “Overall, the LEI continued to signal uncertainty for economic activity ahead and is consistent with The Conference Board expectation for moderate growth at the close of 2024 and into early 2025.”

The persistent downturn in U.S. manufacturing has become a focal point in the 2024 presidential race.

Meanwhile, economic sentiment has taken a downward turn recently.

Even though inflation has eased since the June 2022 recent peak of 9 percent, the Fed’s Beige Book indicates that many districts reported increasing price sensitivity among inflation-weary consumers. Input costs rose faster than selling prices in September, compressing profit margins and further pressuring U.S. businesses, including manufacturers.

Data from the Federal Reserve, released on Oct. 17, showed a 0.3 percent decline in industrial output, following a downwardly revised 0.3 percent gain in August. Analysts had predicted a smaller drop of 0.2 percent for the month.

According to the Fed, the larger-than-expected decline was due in part to disruptions from Hurricanes Helene and Milton, along with the ongoing Boeing machinists’ strike. The aerospace sector, in particular, took a significant hit, with production of aerospace and miscellaneous transportation equipment falling by 8.3 percent, dragging down the overall index.

The broader picture also looks bleak, with industrial output for the third quarter down 0.6 percent. This aligns with other recent indicators pointing to ongoing challenges in the U.S. manufacturing sector.

The latest S&P Global U.S. Manufacturing PMI, a key survey-based measure, showed the sharpest contraction in factory activity in over a year for September. Factory output and new orders dropped sharply, driven by weakened demand.

“The September PMI survey brings a whole slew of disappointing economic indicators regarding the health of the U.S. economy,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement. “Factories reported the largest monthly drop in production in 15 months in response to a slump in new orders, in turn driving further reductions in employment and input buying as producers scaled back operating capacity.”

The deepening decline in U.S. manufacturing, highlighted by the S&P Global report, was reinforced by the Fed’s latest industrial production data. It showed a 0.4 percent month-over-month fall in manufacturing output for September and a 0.5 percent drop compared with the previous year.

Similarly, the Institute for Supply Management (ISM) reported a contraction in U.S. manufacturing for September, marking the sixth straight monthly decline and the 22nd contraction in the past 23 months. Timothy Fiore, chair of the ISM’s Manufacturing Business Committee, noted that demand remains sluggish, with companies hesitant to invest in capital and inventory.

The ongoing slump in U.S. manufacturing has become a key issue on the presidential campaign trail, with both major candidates offering plans to revive the sector.

Speaking in Michigan in late September, former President Donald Trump vowed to “reclaim America’s manufacturing power,” promising tariffs on foreign imports and pledging to provide domestic manufacturers with lower energy costs, taxes, and regulatory burdens.

The latest S&P Global U.S. Manufacturing PMI, a survey-based monthly overview of factory activity in the United States, fell deeper into recession territory in September, data released on Sept. 23 shows. The manufacturing index slumped to 47.0 in September, down from August’s 47.9 and the lowest in 15 months. Readings below 50 represent a contraction in activity.

The decline signals continued deterioration in business conditions within the manufacturing sector, which has been plagued by weakening demand and falling new orders. In particular, new orders in September fell at their fastest pace since December 2022, as manufacturers struggled with declining export demand and reduced domestic sales.

Slumping employment also made a significant negative contribution to the downbeat manufacturing figures, with job losses accelerating at a pace not seen since June 2020.

“Excluding the pandemic, the decline in factory jobs was the steepest since January 2010 as an increasing number of firms reported the need to reduce operating capacity in line with weak sales,” the S&P Global report states.

Cracks in the labor market were behind the Federal Reserve’s decision last week to deliver a large, 50-basis point interest rate cut, with one Fed official saying on Sept. 23 that he was surprised by the pace of deterioration in employment conditions.

“Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,“ Atlanta Federal Reserve President Raphael Bostic, a voting member of the Fed’s interest-rate-setting council, said in comments to the European Economics and Financial Centre. ”In this moment, I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago.”

The central bank’s rate-setting body, the Federal Open Market Committee (FOMC) of which Bostic is a voting member this year, decided last week to lower rates to within a range of 4.75–5.0 percent.

Markets are fully pricing in another rate cut when the policymaking panel meets again on Nov. 7, with the odds split roughly evenly between a smaller quarter-point cut or another jumbo half-point reduction.

But while central bank officials celebrate inflation falling closer to the Fed’s 2 percent target, Monday’s S&P Global data suggests it may be too soon to declare victory in the fight against high prices.

Inflationary pressures picked up across both goods and services, per the S&P Global report, with the increase driven mostly by rising input costs. Prices charged for goods and services rose at their fastest pace in six months, with service sector costs surging due to wage growth. Input costs in services grew at their highest rate in a year, reflecting increased labor expenses, while manufacturing input cost growth cooled slightly, aided by lower energy prices and fewer supply chain snags.

“The survey’s price gauges meanwhile serve as a warning that, despite the PMI indicating a further deterioration of the hiring trend in September, the FOMC may need to move cautiously in implementing further rate cuts,” Chris Williamson, chief business economist at S&P Global, said in a statement.

In contrast to a deepening slump in manufacturing, service sector activity grew at a solid pace in September, per the S&P Global report. The services business activity index came in at 55.4, a slight decline from August’s 55.7. Relatively robust growth in services helped lift the composite PMI measure—which combines both manufacturing and services—to 54.4 in September, a slight decline from the prior month.

“The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds,” Williamson wrote, while partly blaming election-related uncertainty for a sharp slump in optimism about business output in the year ahead.

The deterioration in output-related confidence sent the sentiment gauge to its lowest level since October 2022 and the second-lowest since the pandemic.

The number of people employed in manufacturing in the U.S. fell by 24,000 in August, with the industry down 14,000 jobs year-over-year, according to data from the Bureau of Labor Statistics (BLS). Altogether, manufacturing employment has grown just 0.3% since the Inflation Reduction Act (IRA) and the Chips and Science Act were signed into law by President Joe Biden in August 2022, despite the bills earmarking more than $400 billion in subsidies for the industry.

The August decline is in addition to a recent BLS jobs revision that showed the federal government had overestimated manufacturing employment by 115,000 between April 2023 and March 2024.

“Despite hundreds of billions in Inflation Reduction Act subsidies going to manufacturing and the mind-boggling U.S. deficit, we’ve only seen a less-than-1% increase in total employment,” Aaron Hedlund, director of research at the America First Policy Institute, told the Daily Caller News Foundation. “There is no manufacturing boom.”

The U.S. national debt currently sits at around $35.34 trillion as of Aug. 4, up from $27.75 trillion when Biden took office in January 2021, according to the U.S. Treasury Department. The increase of more than $7.5 trillion dollars is equivalent to over $57,000 for each of the 131,434,000 households that the Census Bureau estimates were in the U.S. in 2023.

Average weekly earnings in manufacturing rose from roughly $1,361 to approximately $1,370 in August, according to BLS data. Weekly earnings remain below their levels from when Biden first took office when adjusted for inflation, with manufacturing salaries rising 17.7% between January 2021 and August 2024, while inflation in that period was roughly 20%, according to the Federal Reserve Bank of St. Louis and the BLS.

In July 2023, the White House issued a press release claiming the U.S. was in the midst of a “manufacturing boom” driven largely by federal initiatives from the Bipartisan Infrastructure Law, the CHIPS and Science Act and the IRA to boost domestic green technology and semiconductor production. $84 billion worth of the nearly $228 billion of manufacturing projects worth more than $100 million that the Biden administration subsidized via the IRA and the Chips and Science Act have been paused or delayed, according to an investigation from the Financial Times published in August.

“All of the Biden-Harris administration claims on job creation are essentially false,” Peter Earle, a senior economist at the American Institute for Economic Research, told the DCNF. “Most of the rise in employment they are taking responsibility for are actually just jobs slowing returning after being destroyed by pandemic policies — most of all, lockdowns. A sizable number of the remainder of jobs that have appeared over the past three-and-a-half years are not jobs created via economic growth and commercial expansion, but rather a product of their massive debt and deficit policies.”

The White House did not immediately respond to a request for comment from the DCNF.

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One of the most dishonest games being played in economics today is the attempt by various groups (political and financial) to deflect blame for the rise of inflation. The Biden White House and Democrats desperately want to blame Russia and the war in Ukraine, even though inflation was spiking long before the war ever started. The Federal Reserve pretended for years that inflation was not a threat at all despite numerous alternative economists warning what would happen. Now they blame supply chain disruptions instead of their own monetary policies. The GOP wants to blame Biden alone for the crisis while ignoring the dominant role of the Fed in the economy (and their unilateral power) over the course of multiple presidencies.

In the alternative sphere there are some people that try to deny the fact that there is more than one type of inflation. They want to claim it’s all about money creation, but this is simply not true. There is inflation in money supply, but there is also price inflation caused by numerous factors including bottlenecks in production, bottlenecks in resources, bottlenecks in shipping, bottlenecks in energy, etc. Anyone that denies this fact is blinded by bias or just doesn’t understand how inflation really works.

Overall, it’s fair according to the evidence to put MOST of the blame on the central banks and their 14 year program of bailouts and QE policies. If you have read my previous articles on the Fed’s involvement you know that my position has remained the same for years – I predicted a stagflationary crisis based on the position that that the Fed was deliberately creating a monetary disaster to make way for a new digital currency system tied to a global framework, and this is exactly what has happened so far.

That said, too much money chasing too few goods is not the only problem we face as a nation. There is also the issue of global interdependency and our reliance on other countries, some of them hostile, for production and resources. With supply chain disruptions an ever present danger, it’s not enough to focus on money velocity and the central bank alone – We won’t be solving the crisis that way.

Not to mention, the more the federal reserve raises interest rates the more it costs to support US government debt, which is already well beyond US GDP. If doubts rise over the US being unable to pay for its treasury debts, then foreign creditors may dump their T-bond and dollar holding entirely. This could destroy the buying power of the dollar.

In the liberty movement there is always debate about solutions. We all seem to agree on the core problems but can’t ever seem to agree on what to do about them.

There are those that suggest there’s nothing that can be done economically except prepare and wait for collapse so we can rebuild once the dust has settled. I find myself in this camp more often than not. Then there are those that believe a political approach is possible. After nearly half the states in the US blocked the covid mandates and lockdowns, I am starting to think solutions at the state level might be viable. Then there are those that want to build an alternative system, a parallel economy that competes with the mainstream economy.

This is something I have discussed for a long time – It’s the reason I started Alt-Market 12 years ago. It’s the ideal solution because it is proactive. Instead of waiting around for other people to fix the crisis for us, regular people simply establish their own trade and production systems based on necessities, separating from the dying economy so that when it collapses they are mostly unaffected.

This, however, is a short term solution in that large scale domestic production is eventually needed to return a country and economy to greater prosperity. Growing gardens, making trade items and forming local barter markets is only a way to weather the storm; it is not a long term path to fiscal health. What we need is locally based large scale production of necessities as well as our own domestic resource discovery.

In order to fight back against monetary decline the US needs to produce a majority of its own goods again. If the problem is too much money chasing too few goods, then we can make our own goods here at home instead of relying on countries like China and the unstable global supply chain.

But what if there is an answer beyond domestic production alone? What if we built an economy which focuses on QUALITY? It’s a notion that might have been suggested by others, but it is certainly not being promoted by any economist within the mainstream or any political representative.

The Quality Economy As A Means To Fight Inflation?

Consider this for a moment: What if home based producers were given incentives by states (such as a jubilee on taxes) to manufacture high quality long lasting goods? There are multiple reasons why this model is not being used, all of them faulty.

Carbon control initiatives in the west are actually forcing companies to produce lower quality goods with substandard designs in the name of “saving the environment.” But, if products are low quality and are breaking sooner because of carbon control standards, then people have to go out and buy replacement goods sooner. More retail demand means more manufacturing which means more “carbon pollution” over time. The carbon emissions narrative is complete nonsense and there’s no proof whatsoever that man-made carbon causes climate change, but even by the logic of the carbon lobby quality production makes more sense for the environment. At the very least it means less waste.

Remember when a washing machine used to last for many years? Remember when a lawnmower or a chainsaw was made from quality metal parts instead of being loaded with plastic parts? Remember how grandma had the same working vacuum for decades? Quality used to be a thing, but the idea has been erased from modern economic theory.

Today, it’s all about quantity, because quantity makes a bigger profit (as long as prices remain low and people have the money to buy multiples of an item). If items break constantly it means they need to be replaced constantly, which means companies make more money. In fact, there are many corporations that deliberately design products to break quickly so that consumers must buy another. This method does not work in an inflationary environment; it actually adds to the problem by forcing more money velocity and reducing the number of functional goods in the system.

Let’s say that instead we had numerous manufacturers that operate within the US and they are offered a tax jubilee for as long as they are willing to produce high quality long lasting models of their products. With the tax incentives, they could market such goods at a lower price in order to compete with poor quality goods from places like China. Now, you have given the public access to items that they only need to replace every 5 years, or 10 years, instead of every 12 months.

But what about food, which is a major part of the inflation problem? Well, the federal government actually pays farmers to grow LESS food in order to keep prices higher on commodities markets. Why not simply stop doing that? Or, again, states could offer tax incentives to farmers that produce with the effort to drive down prices, and state governments could offer to buy excess long term foods like wheat as a form of strategic reserve. America used to do this; why don’t we do it anymore?

And how about housing? Simple – Ban foreign purchases of property and only allow American citizens to buy American land. American citizens have a right to private property under the constitution. Foreign investors and governments do not have that right.

The goal of each of these policies would be to free up supply without killing the buying power of the dollar and without deliberately crushing credit markets and triggering mass job losses.

In this environment money velocity slows down and there are more goods on the market because they last longer. Savings go up because people don’t need to spend as often. Prices in general start to go down. Inflation is subdued and eventually defeated, because what is money other than a means to provide necessities and amenities? If those goods last longer then money becomes less relevant to the health of the economy.

What about deflation?  Would high quality production lead to far less sales and a big drop in jobs?  In America’s current 70% service-based economy, yes, for a time.  But, this is going to happen soon anyway as the Fed hikes rates and stifles access to credit.  With my plan, service jobs would be exchanged over time for better paying manufacturing and engineering jobs.

To be sure, there is the argument that quality goods and more savings could lead to decadent spending. In other words, there is the theory that the more money people have the more they will spend on frivolity and this might keep inflation alive. The problem is we have not lived in an economy based on quality for several decades, so it’s hard to say how people will react. If people have long lasting items and are secure in their basic necessities, then what is compelling them to spend with wild abandon? Not much.

The establishment would like to keep the public dependent on the system by reducing our buying power and controlling access to goods. I suspect that they will one day offer the same kind of solution – A return to quality. But only at the price of subservience. The World Economic Forum’s “Shared Economy” concept which they clearly plan to introduce after there is a major financial collapse would require quality based production, other wise it would fail miserably. If everyone in the world is going to be sharing everything and private property is outlawed, then the goods that are shared would have to be designed to last.

My suggestion is that we circumvent the establishment entirely and create our own economic model, still based in private property but also adapted to quality production. And, we manufacture all our goods locally within our own states and our own country. I believe this would end inflation, not just today, but for all time.

Will the establishment allow such a system to thrive? They would certainly try to stop it from happening using any means they have available. Decentralization and abundance are the enemies of authoritarianism.  My point is, there is indeed a solution. We don’t need Fed intervention. We don’t need sky high interest rates. We don’t need stimulus. We don’t need government oppression or foreign interventions. We don’t need globalist centralization or a Great Reset. We don’t need any of it. They will try to convince you that we do.

Regardless of what happens the public must be made aware that there is a better way.

Article cross-posted from Alt-Market.

Normally, U.S. consumers have an insatiable appetite for cheap plastic goods from China.

But now something has changed.

According to CNBC, manufacturing orders from China have fallen by a whopping 40 percent, and as a result many Chinese factories will be closing much earlier in January than usual…

U.S. manufacturing orders in China are down 40 percent, according to the latest CNBC Supply Chain Heat Map data. As a result of the decrease in orders, Worldwide Logistics tells CNBC it is expecting Chinese factories to shut down two weeks earlier than usual for the Chinese Lunar New Year — Chinese New Year’s Eve falls on Jan. 21 next year. The seven days after the holiday are considered a national holiday.

“Many of the manufacturers will be closed in early January for the holiday, which is much earlier than last year,” Monaghan said.

As with so many other numbers that we have been getting lately, there is no way to possibly spin this to make it look good.

What we are facing is truly “a collapse in demand”, and as a result container freight rates are absolutely plummeting…

Carriers have been executing on an active capacity management strategy by announcing more blank sailings and suspending services to balance supply with demand. “The unrelenting decline in container freight rates from Asia, caused by a collapse in demand, is compelling ocean carriers to blank more sailings than ever before as vessel utilization hits new lows,” said Joe Monaghan, CEO of Worldwide Logistics Group.

The bottom line is that U.S. consumers are simply not buying as much stuff as retailers originally anticipated.

And survey after survey has shown that Americans plan to spend less during the holiday season this year.  Here is just one recent example…

Inflation is weighing heavily on the holidays this year.

Roughly half of shoppers will buy fewer things due to higher prices, and more than one-third said they will rely on coupons to cut down on the cost, according to a recent survey of more than 1,000 adults by RetailMeNot.

Of course consumers over in western Europe are suffering right now as well.

In fact, economic conditions are deteriorating even faster over there.

If you can believe it, one recent survey found that approximately two-thirds of all adults in the UK “are worried that they will not be able to afford Christmas dinner”…

Two-thirds of adults are worried that they will not be able to afford Christmas dinner, according to a survey.

The survey, commissioned by the Salvation Army, calculated the cost of Christmas dinner at £7.50 per head but – as the price of food is continuing to rise – the cost has increased since the survey was carried out on 22 October.

All over the western world, we are facing an unprecedented cost of living crisis.

Inflation has been rising much faster than our paychecks have, and that is causing a tremendous amount of financial pain.

Meanwhile, a lot of people have seen the value of their investments go down substantially over the past 12 months.

I really feel badly for those that were heavily invested in crypto.  There are many tokens that have “lost more than 70% of their value”, and the collapse of FTX has raised questions “about whether crypto has a future”…

Already reeling from the so-called crypto winter, investors were dealt a major blow with the high-profile collapse of Sam Bankman-Fried’s FTX exchange in early November, which sent Bitcoin tumbling. To top it off, BlackRock Chief Executive Larry Fink said this week that he expects most crypto companies will fold after FTX’s demise. A Schwab index tracking crypto-linked stocks is coming off its worst month since June, and is down 63% this year.

“Questions about whether crypto has a future have become prevalent after a year during which many tokens lost more than 70% of their value and the collapse of FTX has exacerbated a crisis of confidence that had started in the spring,” said Mark Palmer, an analyst at BTIG LLC.

At the same time, home values have been falling and falling.

As I have covered in previous articles, U.S. homeowners lost a record high 1.3 trillion dollars in home equity during the third quarter alone.

But at least the latest employment number that the government gave us was good, right?

Actually, it wasn’t so good.  It turns out that the Household and Establishment surveys are telling two completely different stories.  Zero Hedge has posted an absolutely outstanding article that breaks this down in great detail…

Recall that back in August, September, and October we showed that a stark divergence had opened between the Household and Establishment surveys that comprise the monthly jobs report, and since March the former has been stagnant while the latter has been rising every single month. In addition to that, full-time jobs were plunging while part-time jobs were surging and the number of multiple-jobholders soared.

Fast forward to today when the inconsistencies not only continue to grow, but have become  downright grotesque.

I would encourage you to read the entire article.  Since March, the gap between the Household and Establishment surveys has ballooned to nearly 2.7 million workers, and some are suggesting that this is being done for political purposes…

What is even more perplexing, is that despite the continued rise in nonfarm payrolls, the Household survey continues to telegraph growing weakness, and as of Nov 30, the gap that opened in March has since grown to a whopping 2.7 million “workers” which may or may not exist anywhere besides the spreadsheet model of some BLS (or is that BLM) political activist.

Of course the truth is that the employment market is not in good shape.

According to Challenger, Gray & Christmas, the number of layoffs in November 2022 was 417 percent higher than it was in November 2021.

A tsunami of layoffs has begun, and I expect to see a whole lot more in the months ahead.

So it is quite likely that this will be a really gloomy month, but I expect that 2023 will be even gloomier.

Editor’s Note: For years, I ignored calls for people to buy precious metals. I took it so far as to deny precious metals sponsors because I didn’t believe in them. After all, during the Trump years the stock market was soaring and precious metals, while performing well, didn’t seem like a prudent choice for investments. Things have clearly changed.

I am now sounding the alarm bells. Every American with wealth or retirement to protect MUST consider moving large portions of it them to precious metals while that’s still doable. To do so, they should work with companies who are not working against America’s best interests. Of the many precious metals companies that I vetted out, I found that the vast majority are working with and donating to the Democrat Party. Many are working with proxies of the Chinese Communist Party. Some are even working with globalists like George Soros and Klaus Schwab. It truly shocked me to find that many “conservative” show hosts and websites were promoting companies who are using their profits to take down our nation.

I have selected three companies who truly qualify as America First. These companies are all listed on my Gold page. Unintentionally, it turned out that one is small, one is medium, and one is large. That’s just how it worked out, but I appreciate that it did because I believe it gives Americans the choices they need to work with companies who can send them physical precious metals and/or help them open self-directed IRAs backed by physical precious metals. There are other options, but those two are the ones I recommend, not as a financial advisor but as someone concerned about the direction of our nation and the course our economy is heading.

Check them out.

***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com.  In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is definitely a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.