US Manufacturing Sees Mild Recession Signs Amid Rate Cut Speculation
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What’s going on here?
The US manufacturing sector showed mild recession alarms as the November ISM index dipped to 48.4, despite a rise in new orders. Meanwhile, construction spending recorded a notable increase, hinting at potential Q4 growth.
What does this mean?
The manufacturing ISM index's dip indicates potential contraction, raising concerns about economic health, while improved residential investment could uplift economic growth projections. Survey respondents flagged election uncertainty as having eased, but trade policy shifts remain a concern.
Why should I care?
For markets: Reading the Federal Reserve's tea leaves.
The Federal Reserve might be eyeing a rate change, as Federal Reserve Board member Christopher Waller suggests a possible cut to maintain labor market stability against persistent inflation risks. The upcoming Consumer Price Index report will likely guide the Fed's next moves, with a modest print leaning towards a 25 basis point cut.
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