Prime Minister Boris Johnson and the European Union reached a Brexit deal in last-minute talks on Thursday, giving reassurance to the foreign exchange market and a boost to the equity market. But its passage is far from assured, with several immediate hurdles still to be overcome, including what is expected to be a close vote in Parliament on ... READ MORE >
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Hiring expected to slow in September jobs report
The labor market is expected to continue to lose steam in September, with the total change in employment likely increasing by 115,000 jobs on the month, and the unemployment rate likely rising to 3.8%. Given the slowdown in domestic manufacturing activity and goods production, we note there is downside risk to our top line forecast when the report is ... READ MORE >
US manufacturing activity hits 10-year low point
Contraction in U.S. manufacturing is continuing, with activity reaching a ten-year low in September, as economic and political uncertainty weigh on the industrial sector. According to the latest Institute for Supply Management report, manufacturing reached its lowest point since June 2009 after a second straight month of slowing. The index registered ... READ MORE >
Economic growth is running out of steam, RSM data shows
The U.S. economy likely grew at a 2.0% yearly rate in July and August, a drop from the 2.3% yearly rate of U.S. real GDP growth in the first quarter, according to the RSM US Real GDP Index (see chart below). (The index is based on a subset of indicators used by the National Bureau of Economic Research.) So far the domestic economy has absorbed two ... READ MORE >
The RSM Brexit Stress Index moves up amid global financial backlash and domestic slowdown
The RSM Brexit Stress Index moved up again this week, showing significantly higher levels of stress after the United States escalated its trade war with China and the Chinese renminbi was devalued against the U.S. dollar, causing upheaval in the global markets. The composite index, which measures economic stress surrounding Britain’s impending departure ... READ MORE >
Trade war takes dangerous turn toward currency wars: What could happen next?
Chinese fiscal and monetary authorities permitted the yuan early this week to slip below the important psychological level of 7 to the dollar for the first time since 2008. It was a retaliatory measure by China against President Trump’s threat to impose an additional 10% tariff on $300 billion in Chinese exports, beginning Sept. 1. The Chinese government ... READ MORE >
US July employment report: “A Gentleman’s C”
Downward revisions to the May and June estimate of total employment as well as a decline in total and aggregate hours worked cast a pall over a total change in July employment of 123,000 (164,000 top line less net downward revision of 41,000) and the unemployment rate that held steady at 3.7%. While job gains were solid in manufacturing, goods production, ... READ MORE >
US employment preview: hiring deceleration amid steady unemployment rate
The U.S. economy likely generated roughly 150,000 jobs in July and the unemployment rate remained steady at 3.7%. The July employment report—due to be released by the government Friday—is traditionally impacted by seasonal adjustments that will likely include sharp slowing in education and government hiring along with a notable pick up in leisure and ... READ MORE >
Fed cuts interest rates with another cut likely in September
Reductions or increases in U.S. Federal Reserve’s policy rate are often like trying to kill a mosquito with an anvil; they may get the job done but the fallout is always widespread and sure to cause a commotion. So it is with today’s rate cut as the Federal Open Market Committee sought to provide a cushion to a rapidly deteriorating global economic ... READ MORE >
Central banks brace for economic slowdown as manufacturing reflects contraction
A slowing global economy and declining bond yields across the developed world—some negative—portend a deteriorating business climate ahead. To combat this broad slowdown, global central banks are shifting monetary policy toward more accommodative stances that include real negative rates, nominal negative rates, large-scale asset purchases and possibly ... READ MORE >