US Numbers Disappoint Again
- Philly Fed Manufacturing Index disappoints
- Current Account release
- Unemployment Claims disappoints
The US economic numbers that came out during the trading session on Thursday were very disappointing yet again. This appears to be becoming somewhat of a pattern. The United States seems to be slowing down, and that will continue to cause issues for American confidence. Although the stock market has been rallying it’s more than likely a function of the Federal Reserve and the US/China trade situation rather than anything currently going on.
US economic numbers released
The economic releases during the trading session were disappointing again, as the Philly Fed Manufacturing Index came out at 0.3, as opposed to the 8.1 expected for the announcement. Furthermore, the previous month was 10.4, so the November numbers were a far cry from what has been seen. The numbers show a sharp downtrend in manufacturing. This is highly sensitive to the US/China trade situation and even more importantly global growth.
Current Accounts came in at -124 billion, slightly worse than the anticipated -122 billion. This shows that there is still a discrepancy when it comes to imports and exports, but that should not be a huge surprise when it comes to the US economy. It should be noted that a lot of this comes down to the sluggishness of the global economy.
Most importantly, the Unemployment Claims came out at 234,000 for the week, higher than the anticipated 225,000. This is an uptake in unemployment and not something that will be looked upon with favor. The employment situation is crucial for the economy going forward, and as a result, it’s impossible to think that the numbers will be paid attention to by the Federal Reserve. Therefore the status quo should keep the Federal Reserve on the sidelines going forward.
Still cracks appearing in the US economy
The main take away from this announcement is that there are still cracks in the US economy, as it is still showing signs of slowing down. This is a problem, as the US had been one of the “bright spots” in the world. If it does start to break apart, that would be very negative and could reverse the overall attitude of the currency markets, as well as equity flows.
Money is still flowing into the United States, but it is most certainly starting to show signs of slowing down. Therefore it does warrant paying attention to as a shift of the overall monetary flow around the world. It will certainly have ramifications in places such as the currency market, and then possibly the gold market if people start running for cover. It’s very unlikely to happen over the holidays, but the beginning of next year could be somewhat crucial.