As has often been the case in recent years, the monthly U.S. employment report provides a glimmer of light in a gray picture. A net gain of 222,000 payroll jobs in June markedly exceeded the expectations of analysts who projected that slow economic growth would have some impact on employment gains.
I’m not sure I would call it fireworks, but the June manufacturing report from the Institute for Supply Management (ISM) certainly contains some buoyant signs for the U.S. factory sector. The overall Purchasing Mangers’ Index rose by nearly three percentage points to 57.8%, its highest level of what has been an impressive post-August 2016 run.
The buzz about the “Internet of Things” has been brewing for years. Companies like SpaceX, Tesla, Apple, Uber, and Google have been pouring investments into universal satellite internet, autonomous cars, artificial intelligence, and wearables.
Your throat hurts. Your knee throbs. You feel discomfort in your lower back. These are all small symptoms that alert you to a potential problem. That is the role of a symptom. It is an indicator. A telltale sign of the existence of a problem or undesirable situation.
As expected, the Federal Open Market Committee, the Fed’s monetary policy body, announced an increase of 25 basis points in the target for its consequential federal funds rate. Today’s action is only the fourth time since the economy bottomed in June 2009 that that Fed has acted to remove its extraordinary monetary accommodation.
In May, the U.S. unemployment rate fell to a remarkably low 4.3%, the lowest level since May of 2001. In the past, few would have doubted that this was either at or close to full employment, the level below which wage and inflation pressures begin to create growth-killing instabilities.
May saw the first increase in the Purchasing Managers’ Index (PMI) since February. Even accounting for the modest PMI dip in March and April, the progression of the index, since the recent low of August 2016, has been impressive. It suggests sustainability of moderate improvement in factory sector growth.
h the 6,000 new factory-sector jobs in April, manufacturing employment has now increased for five consecutive months, with an average of 14,200 new jobs gained per month. This is an impressive turnaround from a particularly weak period. Overall, this is the most convincing evidence that the broad manufacturing picture is starting to show some real improvement from years of weakness.