David Brancaccio: Let’s talk further about the economy as the trading day begins. Each Monday, we turn to Julia Coronado, senior U.S. economist at BNP Paribas who joins us live from New York. Julia, good morning.
Julia Coronado: Good morning.
Brancaccio: Julia, I was looking through the data from the manufacturers there; some growth, some, is implied here, I think.
Coronado: That’s right. The index is just above 50 which means there is growth in manufacturing output but it is slower than it was earlier in the year.
Brancaccio: Domestic demand — looking through that data — still OK; I suppose that’s something to latch onto.
Coronado: Yes, the U.S. has been doing relatively well. We’ve seen a slowdown in a lot of areas of the world and the U.S. has also slowed down, not quite as much but I think U.S. manufacturers are starting to feel the pinch of the global slowdown. We really have benefited in the last couple of years from the boom in Asia, the boom in Latin America, and a much healthier European economy; now all of those things are more subdued and that’s affecting the U.S.
Brancaccio: More subdued is right. This market outfit also, did surveyed the people who did the ordering for factories in Europe and across the euro zone things are looking down even in places like Germany.
Coronado: That’s right. The effect of all of the fiscal austerity and belt tightening are really being felt, even in Germany. So Germany had like the U.S. been holding on much better than the rest. But now they are also being dragged by the lack of demand by places like Italy and Spain. And those indexes have fallen deeply into negative territory. So they’re really hurting in those southern European countries.
Brancaccio: I don’t know if you saw this news story also this morning, Reuters reporting that the private equity firm, Carlyle Group is agreeing to keep Sunoco’s big East Coast oil refinery from closing down as expected. I guess, that could keep oil prices in the East from spiking again.
Coronado: And that’s been the good news for consumers; while there’s been a lot of bad news, one of the rays of sunshine has been falling gasoline prices — which is a welcome development as we enter the summer travel season. That’s going to help; keeping that refinery open helps keep retail gas prices low and helps keep consumers feeling a little bit better about things.
Brancaccio: Julia Coronado, BNP Paribas. Thank you very much.
Coronado: It’s a pleasure.