Data Released This Week Signals More Weakness in Economic Activities
International Trading
THE TECHNIQUE OF GIVING A GOOD MASSAGE
14 years ago
Saturday, August 21, 2010
, Posted by Usman Ali Minhas at 10:46 AM
Data released this week from the United States further signaled the recent weakness in overall economic activities, where the recovery seems to be losing pace, as activities in the manufacturing, housing, and labor sectors continue to show more deterioration, while inflation was stable throughout the month of July.
The start was with the Empire manufacturing index for the month of August, as despite that the index showed expansion, yet it failed to meet estimates, while the Philadelphia Fed index dropped below expectations and showed contraction in activities throughout the same month.
Activity in the manufacturing sector started to show signs of weakness over the past few months, where weak demand levels from inside and outside the United States indeed weighed down on manufacturing activities.
The industrial production index signaled that activity in the industrial sector expanded in July above expectations, while capacity utilization also signaled rising activities after rising in the same month, where it seems that factories are increasing their output levels gradually, though given the recent weakness in activities, we shouldn’t expect this to continue.
Meanwhile, the producer price index released for the month of July signaled that prices though were rising, yet they remain well under control, where expectations from the Federal Reserve Bank signaled that inflation shouldn’t pose any threats any time soon, since the Fed expects inflation to remain subdued for some time.
Moreover, the housing data released also showed further weakness, where the housing starts rose below expectations in July, while building permits dropped over the same month opposite to expectations, where the housing market continues to suffer from elevated unemployment, tightened credit conditions, and elevated foreclosures.
Finally, the leading indicators rose in July by 0.1%, where this signals that the recovery will continue throughout this year, though the pace of recovery is expected to be rather slow, as the economy is still expected to fall short from fulfilling its long term growth potentials.
As for the U.S. dollar, it rose throughout the course of this week against major currencies, where the pessimism that dominated towards the end of the week helped in pushing the U.S. dollar higher against its major counterparts, while stock markets also suffered the same destiny, as after fluctuating all week, stocks dropped towards the end of the week.
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