This is fast becoming the “12% recession”, as economists and media commentary rushes to quell any notion of systemic economic retrenchment. If it isn’t “the dollar” or “overseas demand”, then surely the dramatic (and always “unexpected”) reversal of US manufacturing is but a novelty to be regarded as inconsequential on Yellen’s road to the Promised Land. Reuters author Lucia Mutikani gives us two of the three at once:

Manufacturing, which accounts for 12 percent of the economy, has also been slammed by business efforts to reduce an inventory overhang and slowing demand overseas.

It makes for a very interesting, and telling, contrast given that just over a year ago manufacturing was riding high and nobody suggested it was “only” 12% (the parallel to the oil and gas downturn; when contributing to “the economy” it is combined confirmation, now that it is subtracting it is as if its own world). Here is Mutikani, writing for Reuters, on September 2, 2014, describing a multiple of high-rated PMI’s:

U.S. manufacturing activity hit a nearly 3-1/2-year high last month and construction spending rebounded strongly in July, signs the economy entered the third quarter on strong footing.

Tuesday’s upbeat data added to reports on employment and housing that have suggested growth remains sturdy, despite a slowdown in consumer spending in recent months.

It is exceedingly conspicuous that Reuters would note “despite a slowdown in consumer spending” as if manufacturing were wholly apart from it (and thus the consumer was the triviality to be ignored in the sure “boom” that was upon us) and yet a year later, with manufacturing joining consumer spending in the “unexpected” deluge of negativity, it is no longer important. You might be forgiven if you suspected the inconsistency of analysis is imparted through fitting “data” to one’s orthodox-driven conclusion; a year ago manufacturing confirmed the boom, now it is only 12%.