From the Federal Reserve Bank of Richmond’s latest survey of manufacturing activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):
Manufacturing activity in the central Atlantic region pulled back in October after improving somewhat last month, according to the Richmond Fed’s latest survey. The seasonally adjusted index of overall activity was pushed lower as all broad indicators of activity — shipments, new orders and employment — were in negative territory. Other indicators also suggested additional softness. Capacity utilization turned negative, while backlogs remained negative but improved from its September reading. Moreover, the gauge for delivery times changed little, while raw materials inventories grew at a slightly quicker pace, and growth in finished goods edged lower.
…
Looking forward, assessments of business prospects for the next six months were less optimistic in October. Contacts at more firms anticipated that new orders, backlogs, capacity utilization, and vendor lead-times will grow more slowly than anticipated a month ago.
The company at this point isn’t just a key purveyor of lower labor standards and a globalized and concentrated supply chain, it is a key tell for policymakers. Walmart data was used by the Federal Reserve’s FOMC to understand labor markets, inequality, health care costs, supply chains, and inflation. As the global recession began to come into view, one FOMC member noted, ”It’s certainly disconcerting to hear that one of the largest private institutions in the world – Wal-Mart – is missing its growth targets fairly significantly.” It is as if the new maxim had become, what’s good for Walmart is good for America.
…
In the 1950s, the so-called “Treaty of Detroit”, an agreement between government, business, and labor for ever increasing wages at automakers, set the tone for the next twenty years of political economy. From the 1970s onward, the new social contract was increasingly set, not just by companies like Walmart, but by Walmart itself. As a new social contract, let’s call it the “Treaty of Walmart”, emerged as a deal cut between the US government, the Chinese government, and global trading corporations, American society began to reflect a race to the bottom. This strike is thus worth watching – if Walmart loses some pricing pressure because of tactics that impact the company’s supply chain or ability to sell, we’ll be in uncharted territory.
Email Sign-Up
RSS Feed