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 / Apr 11, 2020
The Federal Reserve greatly expanded the collateral that it is willing to buy, further easing pressures in financial markets.
Wells Fargo Economics & Financial Report / Aug 30, 2021
In other economic news, output continues to ramp up across the U.S., even as the resurgence in COVID cases is leading to some pullback in consumer engagement.
Wells Fargo Economics & Financial Report / Jun 08, 2021
This week\'s light calendar of economic reports showed supply chain disruptions tugging a little at economic growth.
Wells Fargo Economics & Financial Report / Apr 05, 2022
The key factor that will drive interest rates is the Fed’s belated effort to rein-in inflation.
Wells Fargo Economics & Financial Report / Jan 19, 2021
The U.S. economy appears to be losing some momentum as the calendar turns to 2021 and the public health situation continues to deteriorate.
Wells Fargo Economics & Financial Report / Mar 21, 2020
Daily life came to a screeching halt this week as governments, businesses and consumers took drastic steps to halt the COVID-19 pandemic.
Wells Fargo Economics & Financial Report / May 26, 2020
Employment fell in all 50 states and 43 states saw their unemployment rate rise to a record in April. The damage is already hard to fathom-a 28% unemployment rate in Nevada and still another month of job losses ahead.
Wells Fargo Economics & Financial Report / Oct 05, 2019
Survey evidence flashed signs of contraction in the manufacturing sector and indicated weakness spreading to the services side of the economy, while employers added a less-than-expected 136K jobs in September.
Wells Fargo Economics & Financial Report / Mar 28, 2020
The U.S. surpassed Italy and China with the most confirmed cases of COVID-19. Europe is still the center of the storm, with the total cases in Europe’s five largest economies topping 230,000.
Wells Fargo Economics & Financial Report / Jun 26, 2021
Okay, so I’ve gotten about half a dozen calls since Wednesday asking if I saw the May CPI numbers that came out this week.