A lot is riding on the August U.S. jobs report – a good chunk of justification for the first Federal Reserve interest rate rise in nearly a decade and a lot of face-saving at the world’s most powerful central bank.
The Fed already has postponed what were clear intentions to raise rates by mid-year and some are now saying with financial markets in a renewed period of turmoil and volatility, the window of opportunity for lift-off is narrowing.
Depending on which report you read from the same source, the U.S. economy is doing extremely well and also in danger of slowing sharply.
The Institute for Supply Management’s closely-watched readings on the vast service sector showed it was booming in July, but it also just reported that manufacturing was quickly losing momentum in August. We’ll have another update on non-manufacturing performance in a couple of days.
LONDON, Sept 1 (Reuters) – Europe’s economies are generating
little inflation and manufacturing growth is slowing across much
of the continent, a series of surveys showed on Tuesday.
Taken together with a slowdown in Asian manufacturing, led
by China, the latest European purchasing managers’ indexes
suggest only some economies, among them Germany and Spain, are
The surprise rise in British inflation from zero to 0.1 percent and core inflation by 0.4 percentage point to 1.2 percent in July supports the view rates soon must go up – and also it doesn’t.
Depending on who you read, underlying price pressures are picking up in the economy and will give policymakers added confidence they will need to tighten policy; or the data are mainly down to a seasonal timing issue over discounting of clothing and footwear; or on the whole the numbers still suggest widespread disinflation pressures in the economy and so tell us little about the timing of the first rate hike.
It’s not very often you come across a chart like this. Usually this kind of thing happens once every 10 years or so.
If this surge in this reliable gauge of services business in the world’s largest economy is for real and sustained, it may just be the sign of rapid acceleration that everyone has been waiting for in what so far has been a fitful recovery.
LONDON, Aug 6 (Reuters) – China’s economy is growing only
half as fast as official data shows, or maybe even slower,
according to foreign investors and analysts who increasingly
challenge how the world’s second largest economy can be measured
so swiftly and precisely.
Beijing’s official statisticians reported last month that
China’s economy grew by a steady 7.0 percent in the first two
quarters of the year, spot on its official 2015 target.
LONDON (Reuters) – Now that U.S. Federal Reserve chief Janet Yellen has made it clear she’s looking out for “some” improvement in the job market before voting for the first Fed interest rate rise in nearly a decade, so is everyone else.
The challenge is that the U.S. economy is generating very little inflation – not to mention disinflation coming from China and nearly no inflation in Europe – leaving many questioning whether the Fed even should be considering a rate rise.
A U.S. Federal Reserve interest rate hike in September is almost certain according to many forecasters and investors, but the decision to tighten policy for the first time in nearly a decade is not as clear-cut as it may appear.
Leaving aside that just a few months ago most of the same people said the same thing about June, which came and went with no rate rise, any unanimity around such a key turning point for the global economy ought to be extremely rare.
BENGALURU/LONDON (Reuters) – With little sign of accelerating growth or inflation, most central banks are still looking to ease monetary policy, in stark contrast to the U.S. Federal Reserve which is on the brink of its first rate hike in nearly a decade.
That bias towards easing, from China to Canada, comes at a time when the world economy, with a few exceptions like the United States, appears weak despite historically-low oil prices and bond yields along with soaring stock and property prices.
After years of defying gravity and outperforming the rest of Europe, Britain’s job market looks like it might be slowing down.
That means that renewed worries about an imminent rise in British rates, which have just resurfaced this week following hawkish remarks from Bank of England Governor Mark Carney and outgoing rate-setter David Miles, might not be on such a solid footing.