The manufacturing resurgence continued as output rose 0.3 percent in October, the fifth monthly gain in a row, resulting in an annualized growth rate of 5.0 percent over the period.
Retail sales and initial claims data show the economy remains generally healthy. However, uncertainty around U.S. economic policies and broadening global economic risks have the potential to negatively impact the economic expansion.
Consumer sentiment indicators remain at broadly favorable levels but rising interest rates and accelerating price increases are starting to have an impact.
Initial claims remain near a record low as a percentage of the labor force while consumer credit growth slowed in September. Both are positive signs for the economy.
U.S. nonfarm payrolls added 250,000 jobs in October and hourly earnings growth accelerated to a 3.1 percent rate, the highest since April 2009. Both are positive signs for the labor market and the economy overall.
The Manufacturing Purchasing Managers Index registered a 57.7 percent reading in October. Despite a small decline, the index remains well above neutral and is a positive sign for the manufacturing sector.
Consumer Confidence rose for the fourth month in a row to 137.9, the highest level since September 2000 and just 6.8 points below the all-time record.
Real gross domestic product rose at a 3.5 percent annualized rate in the third quarter, driven primarily by strong gains in consumer spending. A positive outlook is further support by the results of the AIER Leading Indicators index, which scored a healthy 88 in September.
New orders for durable goods increased 0.8 percent in September while new orders for core capital goods fell 0.1 percent. Today’s data are generally positive, but core capital-goods orders have been essentially flat over the past two months.
Sales of new single-family homes fell 5.5 percent in September, the fourth decline in a row, while inventory rose for the sixth straight month putting the months’ supply at the highest since 2011. Rising home prices and higher interest rates are likely to weigh on housing activity over coming months and quarters.
Modern central banking claims to make the money supply more elastic to stabilize the economy. The rationale says that left to itself, the market economy is unstable. Yet the evidence suggests the opposite: that modern central banking is the main culprit for boom and bust.
The housing market appears to be struggling with a combination of elevated home prices and rising interest rates. With interest rates likely to drift even higher over coming months and quarters, the outlook for housing is cautious.
The latest data from the Bureau of Labor Statistics shows a surge in job openings in August, to 7.136 million, while private sector job openings totaled 6.464 million. Both are at new all-time highs.
The next financial crisis is just around the corner. It is only a matter of time until once again the world economy will be shocked by a massive contraction of liquidity. All markets are linked, and the origin of a new crisis can come from anywhere. A global financial crisis is the result of an interplay between domestic and external factors. The drama has many players and none of them is innocent.
The impact of Hurricane Florence was evident in the September employment report as nonfarm payrolls rose just 134,000. However, the preponderance of data suggests the labor market remains robust and that the economy is likely to grow at a healthy pace.
The latest monthly reports from the Institute for Supply Management show that the economy continued to expand at a robust pace in September. Details in both reports were decisively positive and suggest strong, broad-based growth in the economy.