Sep 3, 2011
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Factory and Hiring Data Reduce the Fear of Recession
Factory activity and hiring data on Wednesday suggested a recession could be avoided despite some weak economic signals.
Factory activity showed a strong rebound in demand for manufactured goods in July as orders for motor vehicles posted their largest gain since 2003, and the forecasts for the institute for Supply Management’s index of national manufacturing to fall to 48.5 in August from 50.9 in July may be overdone while the official survey will published on Thursday, since ISM does not take into account that the auto industry is getting a very strong pick-up in orders as parts are replenished and production is continuing.
In addition, ADP also showed private employers added 91,000 new jobs this month after expanding payrolls by 114,000 in July, and nonfarm payrolls are expected to have increased by only 75,000 in August, slowing from July’s 117,000 rise. The jobless rate is seen holding at 9.1%.
It implied that the labor market is soft but not falling apart, and the economy is not on the verge of a recession, according to Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Factory activity showed a strong rebound in demand for manufactured goods in July as orders for motor vehicles posted their largest gain since 2003, and the forecasts for the institute for Supply Management’s index of national manufacturing to fall to 48.5 in August from 50.9 in July may be overdone while the official survey will published on Thursday, since ISM does not take into account that the auto industry is getting a very strong pick-up in orders as parts are replenished and production is continuing.
In addition, ADP also showed private employers added 91,000 new jobs this month after expanding payrolls by 114,000 in July, and nonfarm payrolls are expected to have increased by only 75,000 in August, slowing from July’s 117,000 rise. The jobless rate is seen holding at 9.1%.
It implied that the labor market is soft but not falling apart, and the economy is not on the verge of a recession, according to Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
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