This week's indicator performance presented mixed evidence of strength of the U.S. economy and the impact tightening monetary policy is having on key sectors.
Signaling slower growth rather than outright recession, industrial production regained its footing in September after declining in three of the prior four months. Total production rose 0.4% last month, as a matching gain in manufacturing and a 0.6% rise in mining more than offset a 0.3% slide in utilities. On broad-based strength, manufacturing output extended its growth streak to three months underpinned by solid business investment and demand for consumer goods. That said, the manufacturing sector is losing momentum. Manufacturing production increased at just a 1.9% annual rate in the third quarter after rising 3.6% in the second quarter.
Regional manufacturing surveys released this week support this loss of momentum. The Empire State and Philadelphia Fed surveys continued to signal contraction in early October as both headline indices remained in negative territory. Encouragingly, the surveys have been signaling less strain from supplier deliveries, reflecting, in part, softer demand, yet consistent with less upward pressure on prices. Expectations are high for manufacturing activity to start contracting in coming months as rising interest rates, consumers' spending changes from goods to services, and downturns in Europe and China collectively take a toll. Business surveys are picking up on this pessimism, as evidenced by the six-month ahead Empire State business conditions index falling to its second weakest reading since 2009 and the Philly Fed's future general activity index posting its fifth consecutive negative reading.
Wells Fargo Economics & Financial Report / Mar 29, 2023
The FOMC hiked the federal funds rate by 25 bps on Wednesday amid continued strength in the labor market and elevated inflation.
Wells Fargo Economics & Financial Report / Aug 11, 2020
The resurgence in COVID-19 in much of the Sun Belt appears to have topped out, although cases are rising faster in some smaller mid-Atlantic states and in parts of Europe, Asia and Australia.
Wells Fargo Economics & Financial Report / Aug 17, 2019
Markets gyrated this week as the spread between the ten- and two-year Treasury\'s turned negative for the first time since 2007. Financial markets seem to expect that the sharp slowdown in growth overseas will soon spread to the United States.
Wells Fargo Economics & Financial Report / Sep 14, 2020
In the holiday-shortened week, analysts’ attention remained on the progress of the labor market. Recent jobless claims data remain stubbornly high and point to a slowing jobs rebound.
Wells Fargo Economics & Financial Report / Jul 18, 2020
Two countervailing themes competed for attention this week in financial markets. The first is that for the most part, economic data continue to surprise to the upside and do not yet rule out prospects for that elusive V-shaped recovery.
Wells Fargo Economics & Financial Report / Jan 18, 2020
Mild weather helped housing starts surge 16.9% in December to a 1.61 million-unit pace, the highest in 13 years. Manufacturing surveys from the New York Fed and Philadelphia Fed both rose more than expected in December.
Wells Fargo Economics & Financial Report / May 25, 2021
Over the past year, the housing market has become white-hot.
Wells Fargo Economics & Financial Report / May 03, 2023
U.S. Economy expands but at a weak rate. Regional bank failures cause corporate investment spreads to widen again. House Republicans pass bills that affect the debt ceiling.
Wells Fargo Economics & Financial Report / Nov 10, 2020
As of this writing, the outcome of the U.S. presidential election is undecided. Joe Biden, however, appears likely to become president based off of his growing lead in several key states.
Wells Fargo Economics & Financial Report / Mar 14, 2020
Financial conditions tightened sharply this week as concerns over the coronavirus and the economic fallout of containment efforts mounted.