Market and economic update: U.S. employment market remains strong
After the recent bumper crop of economic data, last week’s calendar was quite meager. The U.S. employment market remains strong, with the four-week average of initial unemployment claims falling below 300,000 for the first time in eight years. The Institute for Supply Management (ISM) Non-Manufacturing Index reached its highest level post-recession, and the manufacturing Purchasing Managers Index (PMI) reached its highest level in more than three years, consistent with an improving economic environment.
The U.S. economy seems to remain on solid footing. This week’s key data releases will be retail sales and industrial production for July, which will likely reflect continued modest economic growth.
Foreign purchasing manager survey data generally indicate the economic environment is not as rosy outside the United States. Europe continues to see modest growth, with the eurozone composite PMI reaching a three-month high and the United Kingdom PMI remaining near its highest recorded levels.
Data for Japan showed similar modest improvement. Emerging market data moderated from its June improvement, although on average, it’s continuing to indicate growth. Brazil leads the weakness in data, with growth suffering from relatively tight monetary policy to combat inflationary pressures. On average, the trend in economic activity outside the United States seems tilted toward modest improvement.
For more information, go to https://reserve.usbank.com/insights/market-economic-update-08-11-14.
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