US data revive rate cut hopes
Tuesday 04 July 1995
"There is no evidence that the decline in manufacturing is bottoming out. It raises the odds the Fed will move," Josh Feinman, an economist at Bankers' Trust in New York, said. Others still thought a wait-and-see decision more likely. David Bloom, US economist at James Capel, said: "The economy is precariously balanced and any attempts at fine-tuning at this stage will only serve to undermine the Fed's credibility."
Views about how the Fed will react to recent statistics have see-sawed during the past two weeks. The broader indicators have indicated a sharp slowdown in growth between the first and second quarters, but there has been more buoyancy in areas like the housing market, which have reacted to lower long-term interest rates.
The National Association of Purchasing Managers index of activity fell to 45.7 in June, rather than recovering as expected. It was the second month the index was below 50, indicating a decline in industrial output. A level of around 45 is taken as the dividing line between recession and recovery.
The output index fell, although new orders rose a fraction thanks to export orders. The employment component of the index recovered, but was still under the 50 mark, suggesting job reductions for the fourth month running. The employment report due on Friday will bring official jobs figures, but analysts had been predicting an increase of about 125,000 in the number of jobs after shock declines in the previous two months.
The good news was that price pressures diminished. The prices paid index is significantly lower than it was six months ago.
Separate figures on personal income and spending showed that incomes fell in May for the first time since January 1994, although after-tax incomes increased. Consumer spending increased in line with expectations.
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...