Executive Intelligence Review
Subscribe to EIR


The U.S. Economy the Fed Sees

Sept. 23, 2015 (EIRNS)—Four Federal Reserve district banks have just published their monthly reviews of manufacturing activity in their regions, covering the period mid-August to mid-September, and they show clearly the real reason why the Fed refused to raise interest rates at its Sept. 16-17 meeting. The problem was not China‚Äôs economy, as chair Janet Yellin claimed, but that of the United States.

All four Federal Reserve banks—those of New York ("the Empire Fed Survey"), Philadelphia, Richmond, and especially Dallas—reported manufacturing indices well below zero; that is, contraction of industrial production and employment in their regions of the country. Particularly depressed in all four regions were the utilization of industrial capacity, and the average manufacturing workweek, pointing to a drop in wages.

A fifth district bank, the Atlanta Fed, is tracking the third-quarter rate of GDP growth at just 1.5% as of its Sept. 17 reading.