U.S. manufacturing activity slowed to a near three-year low in July and hiring a...
WASHINGTON - U.S. manufacturing activity slowed to a near three-year low in July and hiring at factories shifted into lower gear, suggesting a further loss of momentum in economic growth early in the third quarter as trade tensions between Washington and Beijing persist.
Fed Chairman Jerome Powell told reporters during a news conference that the preemptive monetary policy easing was “not the beginning of a long series of rate cuts.” Powell described manufacturing as “not growing much,” saying “we hope to help that with this rate cut.” The United States’ trade war with China has hurt business sentiment. That, together with disruptions to supply chains caused by import tariffs, is weighing on manufacturing.
The government is due to publish July’s employment report on Friday. According to a Reuters survey of economists, nonfarm payrolls likely increased by 164,000 jobs in July after surging by 224,000 in June. Manufacturing payrolls are expected to have risen by 5,000 jobs last month after advancing 17,000 in June.
Despite the economy shifting into lower gear, mainly as the stimulus from last year’s $1.5 trillion tax cut package fades, the labor market has remained resilient. The economy grew at a 2.1% annualized rate in the second quarter. Economists expect growth will slow to around a 1.5% pace in the third quarter.
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