WASHINGTON - Activity is contracting in the U.S. manufacturing sector but the number of Americans filing applications for unemployment benefits fell last week, signs that factories are suffering from a global slowdown even as the broader labor market remains healthy.
Readings below 50 point to reductions in activity and the August data could heighten fears the U.S. economy is on track to slip into recession, dragged down by economic weakness overseas and an escalating trade war with China.“August’s survey data provides a clear signal that economic growth has continued to soften in the third quarter,” said Tim Moore, an economist at IHS Markit.
While U.S. factories are feeling the pinch from weaker orders overseas and higher input costs due to rising U.S. tariffs on imports, the labor market remains buoyant, providing a support for consumer spending.Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 209,000 for the week ended Aug. 17, the Labor Department said in a separate report. The decline was sharper than expected.
A separate index of leading economic indicators rose in July, pointing to continued economic growth in the coming months. The index, compiled by the Conference Board, had declined in May and June but increased 0.5% last month, boosted by healthy readings for permits to build housing, robust stock prices and low levels of unemployment claims.
Pushing that recession narrative I see.
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