Afternoon Coffee: PMI shows U.S. manufacturing sector shrinks again; farmers face more troubles; Ghosn flights called illegal

“The economic activity in the U.S. manufacturing sector contracted at a stronger pace than expected in December with the Institute for Supply Management's (ISM) PMI dropping to 47.2 from 48.1 in November and falling short of analysts' estimate of 49,” FXStreet.com reports.

The PMI report itself notes that this is the lowest PMI reading since June 2009, when it was 46.3. (Readings below 50 indicate a contraction; readings above 50 indicate growth.)

The report also notes that the overall economy is growing slightly and that the sentiment for near-term growth is “marginally positive.”

"Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the Phase 1 trade agreement between the U.S. and China. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, while Transportation Equipment is the weakest. Overall, sentiment this month is marginally positive regarding near-term growth," says Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, which produces the monthly PMI.

U.S. farmers face another bleak year despite Phase 1 trade deal with China

Reuters reports that despite the Phase 1 agreement to the U.S.-China trade deal, U.S. farmers stare at another gloomy year as the farm economy reels from the worst harvest in decades, not to mention about two years of the trade war.

So much so, farmers are struggling to decide what crops might keep them in business.

Last month, despite President Donald Trump announcing that China had agreed to double its pre-trade war purchases of U.S. agricultural products over the next two years as part of a Phase 1 trade deal, China still has not confirmed the commitment or signed any deal.

For more on the status of farmers and Trump’s billion-dollar subsidies, check out this recent Washington Post article: With Trump’s farm bailout came surprising profits, but little help for the neediest

“Without government assistance, U.S. farm income would have fallen about $5 billion from its already-low 2018 level,” the Post reports. “So the $14.5 billion in bailout funding announced so far represents a substantial reversal of fortune. About three-quarters of the funding already has been distributed.”

Turkish jets used illegally in Ghosn escape, airline says

“A Turkish airline company says its jets were used illegally in Nissan Chairman Carlos Ghosn’s escape from Japan. Istanbul-based MNG Jet said an employee falsified records and that Ghosn’s name did not appear on any documentation related to the flights,” The Associated Press reports.

Rather than face trial on financial misconduct charges, Ghosn jumped bail in Japan and fled to Lebanon earlier this week in a dramatic escape that has embarrassed authorities, the AP reports.

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