(Reuters) – Manufacturing shrank in June for the first time in nearly three years as new orders plummeted, according to one measure of the sector that provided a stark sign of the economic recovery’s slowdown.

The Institute for Supply Management said on Monday its index of national factory activity fell to 49.7 from 53.5 the month before, missing expectations of 52.0, according to a Reuters poll of economists, and below even the lowest forecast.

It was the first time since July 2009 that the index has fallen below the 50 mark that separates expansion from contraction. That was shortly after the U.S. economy emerged from recession.

Manufacturing has been one of the drivers of the U.S. economic recovery, which now appears to be losing momentum over fears about the euro zone’s debt crisis, a slowdown in China and uncertainty over domestic fiscal policy.

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Hopes that Cern scientists have found the “God Particle” were strengthened yesterday when rival American researchers announced their strongest evidence yet of its existence.

As the squeeze-fest from Friday’s oil-spike wears off a little, it is perhaps worth noting just how astronomically insane the world gets when the terrible triumvirate of ‘green’ energy needs, defense spending, and government largesse come together. Why should we worry about 5c or 10c on a gallon of fuel down the local gas station when the US Navy (in all her glory) is willing to pay a staggering $26-a-gallon for ‘green’ synthetic biofuel (made we assume from the very same unicorn tears and leprechaun nipples that funded the ESM).

As Reuters reports, the ‘Great Green Fleet’ will be the first carrier strike group powered largely by alternative fuels; as the Pentagon hopes it can prove the Navy looks just as impressive burning fuel squeezed from seeds, algae, and chicken fat (we did not make this up). The story gets better as it appears back in 2009, the Navy paid Solazyme (whose strategic advisors included TJ Gaulthier who served on Obama’s White House Transition team) $8.5mm for 20,055 gallons on algae-based biofuel – a snip at just $424-a-gallon.

While this is of course stirring all kinds of Republican rebuttal, Navy secretary Ray Mabus believes it vital to diversify as the Navy has been at the forefront of energy innovation for over 100 years (from sail, to coal, to oil, and then to nuclear from the 1850s to 1950s). Indeed, “Of course it costs more,” he told the climate conference. “It’s a new technology. If we didn’t pay a little bit more for new technologies, we’d still be using typewriters instead of computers.” Easy when it’s other people’s money eh?

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