This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Has Obama Lost His Economic Trump Card?

Updated from 3:52 p.m. EDT with a Romney campaign statement

NEW YORK ( TheStreet) -- Barack Obama may have just lost his economic trump card.

The ISM manufacturing index -- a measure of manufacturing conditions in the United States -- dipped to 49.7 in June. The reading signaled contraction in the factory sector for the first time since July 2009.

"The economy just can't get out of its own way," said Josh Feinman, global chief economist at DB Advisors. "It's sobering ... because we went through the Great Recession and we need a period of strong growth to repair some of the damage that was done there and we're just not getting it."

Though the 49.7 reading doesn't indicate a recessionary dip in the U.S. economy, it does continue a trend of lackluster economic indicators that haven't helped the president's re-election message that things are getting better for the American people.

Manufacturing has been a strong suit for the administration and the president's campaign as the sector has grown at a relatively healthy clip for the better part of his term. But serious questions remain as to whether it will continue to grow with mounting international pressures.

Progress on the European debt crisis has lumbered along in 2012, which has resulted in prolonged investor uncertainty. A eurozone slowdown has also hit emerging markets, which send some 30% of their exports to the European Union .

China, a key emerging market, also plays into this global scenario -- one that isn't too rosy for Obama.

"Obviously I think people are worried about China; the expectation is that we will have a soft landing, so instead of 9.2% GDP growth that we got last year, maybe something in the mid- to high-7% area, but that number could be coming down as well, because we've had a continued series of disappointing PMI data," said Sam Stovall, chief equity strategist at S&P Capital IQ.

U.S. exports were particularly weak in May as eurozone manufacturing activity in the second quarter of 2012 was its worst in three years .

A Mitt Romney campaign spokeswoman said Monday that the latest manufacturing news proves Obama hasn't delivered the economic recovery he promised, but Stovall suggested it could be out of his control.

"I think that the president is in a tough position, because while he can talk about the economy , there's not much he can do about it," Stovall added.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs