More data on Thursday highlighted the challenges facing the U.S. economy, including a deepening contraction in manufacturing activity and a further cooling in the job market.
Data showed that the US ISM Manufacturing PMI in July was 46.8, lower than the expected 48.8 and the previous value of 48.5, the lowest since November 2023. The monthly rate of US construction spending in June was -0.3%, far lower than the expected 0.2%, the largest drop since October 2022, and the previous value was revised down from -0.1% to -0.4%. Earlier, the number of initial jobless claims in the United States was 249,000, exceeding the expected 236,000, the highest since the week of August 5, 2023.
After the data was released, U.S. bonds continued to rebound, with the yield on the 10-year U.S. Treasury bond falling below 4%, the lowest since February. The U.S. dollar index fell more than 10 points in the short term. Spot gold once stood above $2,460/ounce, rising to a high of $2,462.21/ounce, and then turned downward, with a short-term fluctuation of about $14, and now fell back to $2,448.70/ounce.
Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee, said that manufacturing economic activity shrank for the fourth consecutive month in July and the 20th time in the past 21 months. U.S. manufacturing activity has entered a deeper phase of contraction. Demand is weak again, output is falling, and inputs remain loose overall. Due to the current federal monetary policy and other conditions, companies have shown reluctance to invest in capital and inventory.
Meanwhile, initial claims for unemployment benefits in the U.S. rose to the highest level in nearly a year, adding to evidence of a slowing labor market. Continuing claims also rose to 1.88 million in the week ended July 20, the highest level since November 2021.
After a series of worrying economic data, the Federal Reserve's interest rate swap market is now fully priced in three rate cuts before the end of the year.
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The article is forwarded from: Jinshi Data
