The disappointing statistics revived Thursday worries about the health of the global economy. There are uncertainties mainly related to the endless Sino-US trade talks. Washington and Beijing still intend to seal the ‘phase 1’ of their agreement in the coming weeks, but there is still work to do. Operators are accustomed to live from now on at the mercy of the sometimes brutal repercussions of these commercial negotiations. Trump assured this day that the place where the partial commercial agreement would be announced would be revealed “shortly”.
“China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon”, Trump said in a Twitter post.
Signs of economic slowdown are also growing across the Atlantic. The regional manufacturing index of the Chicago Fed for the month of October 2019 came out at the weak level of 43.2, against a consensus of 48 place, and an already depressed level of 47.1 for the previous month. This regional manufacturing indicator, down sharply and well below the 50 mark, reflects a sharp contraction in activity. This very bad performance, however, probably results in part from the strike that affected the car manufacturer General Motors. The October index is at the four-year lows. The index of new orders falls to a low of ten years to 37. The reading under 30s are generally only observed during a recession.
According to the latest study by the firm Challenger on the subject, the announcements of layoffs in the US for the month of October 2019 involved 50,275 posts, against 41,557 a month before. This is a sharp rebound in the job cuts ads, but the October total remains consistent with the 12-month average.
Weekly jobless claims in the United States for the week ended Oct. 26, released Thursday by the US Department of Labor, stood at 218,000, against a consensus of 215,000 and a revised reading at 213,000 (against 212,000) a week earlier.
US household income and expenditure for the month of September have also been published. Personal income rose +0.3%, as expected, compared with the previous month, following a 0.5% increase in August. Consumer spending rose 0.2%, in line with expectations after a similar gain in August. The core PCE price index remained stable compared to the previous month.