Snapshot - Monthly viewpoint
Janet Mui: weekly economic update 4 October
Anxious markets are questioning whether weakening US manufacturing data is beginning to spill over into services.
- Concern is growing in markets as a raft of recent data points to a deteriorating global economic picture. Major equity indices were down by as much as 3% at certain points in the week.
- Anxiety rose on the back of data showing US manufacturing contracting. The US services sector also appeared to slow in September.
- Payroll data showed a slowdown in job creation, and wage growth is also slowing. This raises concern that US consumers – who have been an economic mainstay – will contribute less in future.
- Unwelcome data is also emerging in Europe, where manufacturing is now at its weakest in six years.
- These developments pressure the Federal Reserve to take further supportive action again – possibly as early as this month.
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