The Markit survey confirms that U.S. manufacturing is likely to see only a sluggish pace of growth in the third quarter. Jesse Hurwitz More Quotes by Jesse Hurwitz More Quotes From Jesse Hurwitz With labor market turnover stable and demand rising, further gains in employment should drive a modest improvement in wage growth and better rates of household income growth. Jesse Hurwitz business Firms do not appear to be shedding labor. We expect hiring activity to resume in the coming weeks and lead an overall rebound in net employment growth. Jesse Hurwitz company-news Persistently low price expectations increase the risks of monetary policy remaining highly accommodative for longer than currently expected. Jesse Hurwitz top-news We take limited signal on the overall economy from such an outturn. That said, stronger inventory growth mechanically boosts current quarter GDP estimates. Jesse Hurwitz industrials Diminishing labor market slack has led to a modest increase in wage growth, evident across several measures of worker compensation, we expect that wage growth will continue to move up gradually, helping core inflation return toward target once the headwinds from lower import prices subside. Jesse Hurwitz top-news Claims are still low from a historical perspective, and we see little evidence in this morning's report to suggest anything other than healthy labor market separations. Jesse Hurwitz most-read-articles This morning's report provides little new signal on the state of U.S. manufacturing. Demand for many categories of manufactured goods continues to struggle from the effect of a stronger dollar, weak foreign demand and lower energy prices. Jesse Hurwitz most-read-articles The consumer remains the main engine of economic growth. We expect this dynamic to remain in place. Jesse Hurwitz most-read-articles We continue to see a large drag from private inventory investment as trimming headline growth, but with a smaller drag from net trade and more modest equipment investment, the composition of third-quarter GDP is likely to be more balanced. Jesse Hurwitz business We do not expect the recent slowing to lead to a broader pullback in aggregate growth, as service sector activity remains solid. Jesse Hurwitz company-news Combining these data with figures from the Labor Department's employment report suggests that labor market slack continues to diminish, on balance, the data suggest labor demand held up solidly at the beginning of the third quarter. Jesse Hurwitz business We continue to see a stronger dollar and lower energy prices as posing headwinds for industrial output and do not look for a strong rebound in the sector this year. Jesse Hurwitz most-read-articles Trend readings of both initial and continuing claims remain low from a historical perspective, which we expect to continue. Jesse Hurwitz business The survey data suggest better spending on healthcare services, in particular at outpatient care facilities and other medical service providers. Jesse Hurwitz business This is consistent with our expectation that the domestic manufacturing sector will continue to face headwinds from the lagged effects of a stronger dollar and lower energy prices. Jesse Hurwitz most-read-articles Between the solid growth in labor demand and what we view as little remaining labor market slack, we expect that a modest pick-up in wage growth will give Fed policymakers the confidence in the inflation outlook needed to move toward an initial rate hike by mid-year. Jesse Hurwitz business On balance, however, the weak reading is consistent with slower manufacturing activity late in the quarter. Jesse Hurwitz top-news
