Photographer: Matthew Busch/Bloomberg

Manufacturing and Services Executives Have Very Different Views of the U.S. Economy

For the U.S. economy, the good news was on the goods side in July.

“The commentary sections from the ISM Manufacturing and Non Manufacturing reports this month look nothing like each other,” said Bespoke Investment Group following the release of the ISM report on Thursday.

Anecdotal evidence from the services side includes words like “slowdown,” “flattening,” and “quiet” -- in stark contrast to employers on the manufacturing side, who reference “huge sales,” “growing” backlog and that “export orders are continuing to strengthen.”

Bespoke Investment Group

Bespoke Investment Group

As such, the U.S. dollar’s extended decline may be doing more than just changing the investment landscape -- it may also be helping the world’s largest economy find a new growth driver.  Amid a synchronized global recovery, the U.S. economy has seen exports add the most to growth over the past two quarters since the second half of 2013 -- prior to the rapid ascension of the dollar.

Manufacturers -- all else equal -- stand to benefit more from a falling U.S. dollar as a higher share of their output is exported.

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