Forex »

Softness Evident In US Manufacturing

James Boston
Share on StockTwits
Published on
www.finances.com
Softness Evident In US Manufacturing

A very slight sign of softness is creeping into the US manufacturing sector this month according to the latest data release from the Federal Reserve Bank of Dallas. The latest reading on the Dallas Fed Manufacturing Index has been announced as 10.5, this compares to a September showing of 10.8 and an expected rise today to 11.0. It is not just the industrial sector that is showing some signs of cooling this month. The preliminary Purchasing Managers Index (PMI) for the Services sector has just been released by Markit Economics and it is looking a touch weaker at 57.3, last month’s 58.9 was expected to fall but only to around the 58.0 level. Should these preliminary numbers become final then it will be the sixth straight month that this services indicator has declined. The preliminary Composite PMI is also lower at 57.4 compared to a final September number of 59.0.

The US housing market however is showing signs of returning to strength according to the latest Pending Home Sales data relating to the month of September. The month on month number has come in at 0.3% growth compared to the fall of -1.0% in August, expectations however were for a rise to 0.5% today. On a year on year basis this housing metric is now reading at 1.0% in comparison to the -2.2% contraction recorded for the year to the month of August.

The US Federal Reserve will make a policy announcement on Wednesday following it’s scheduled Federal Open Markets Committee (FOMC) meeting, there is no expectation of any alteration in it’s monetary policy stance. Barring any surprises this next meeting of the FOMC will herald the end of the Fed’s bond buying program which at one point saw the central bank inject $85Bn a month into the financial markets.

Share on StockTwits