{"id":592240,"date":"2023-08-02T00:00:00","date_gmt":"2023-08-02T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/08\/02\/manufacturing-is-slowing-across-the-world\/"},"modified":"2023-08-02T00:00:00","modified_gmt":"2023-08-02T00:00:00","slug":"manufacturing-is-slowing-across-the-world","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/08\/02\/manufacturing-is-slowing-across-the-world\/","title":{"rendered":"Manufacturing is slowing across the world"},"content":{"rendered":"

Manufacturing data out yesterday is pointing to a global slowdown:<\/strong> Glob al manufacturing activity continued to expand at its weakest pace since the height of the covid-19 pandemic in July amid a sharp contraction in the eurozone and factories in China going into reverse, Reuters<\/a> reports. Purchasing managers\u2019 index figures out yesterday showed euro area factory activity sinking to its strongest downturn since May 2020 while data out of Asia showed the Japanese, South Korean, Taiwanese and Vietnamese manufacturing sectors all contracting. Factories in China declined for the first time since April, missing expectations for slight growth during the month. <\/p>\n

Fed to press pause on rate hikes next month, say economists:<\/strong> Falling inflation, easing consumer spending and weakening wage growth mean that the US Federal Reserve can afford to take its foot off the gas at its next policy meeting in September and leave interest rates unchanged, economists tell Bloomberg<\/a>. \u201cI suspect the data will be mild enough to meet with the Fed\u2019s approval,\u201d said Douglas Porter, chief economist at Bank of Montreal. \u201cOur core view is that the Fed has done enough, with short-term rates now solidly in positive real terrain, core inflation beginning to come down, and the labor market softening around the edges.\u201d <\/p>\n

Remember:<\/strong> The Fed raised its benchmark interest rate<\/a> to its highest level since 2001 last month despite a softer-than-expected June inflation print. <\/p>\n

Yes, but:<\/strong> Much will depend on this month\u2019s inflation and jobs data. Fed chair Jerome Powell has not ruled out further rate hikes in the coming months should data point to a revival of inflationary pressures. <\/p>\n

A \u201csoft landing\u201d in the US isn\u2019t guaranteed:<\/strong> Markets may be rebounding in optimism that the Fed\u2019s tightening cycle has avoided triggering a downturn in the US economy, but a sharp drop in excess savings triggered by higher borrowing costs and inflation may yet provoke a drop-off in business spending and rising unemployment, according to Reuters<\/a>. Excess savings in the US have fallen more than 75%<\/a> over the past two years, a trend that is also taking place in Europe and the UK. \u201cAs soon as [domestic consumption] starts to fall apart these economies can become very, very fragile very quickly,\u201d one asset manager told the newswire. <\/p>\n

ALSO WORTH NOTING-<\/strong> <\/p>\n