IHS Markit’s U.S. Purchasing Managers Index (PMI) rose from 50.3 in July to 54.7 in August, indicating a continued rise in activity in manufacturing and services as more businesses reopen and more consumers make purchases delayed by the shutdown.
Numbers above 50 signal expansion.
Also in August, the data firm’s Manufacturing Output Index bumped up from 50.9 to 53.6.
After crashing by a record 32.9 percent in the second quarter, U.S. GDP is expected to grow at an annualized rate of 18.3 percent in this quarter, according to economists surveyed by the Wall Street Journal.
In Europe, the PMI slumped from 54.9 last month to 51.6 in August, indicating the recovery there is slowing as new rounds of virus infections renew localized shutdowns across the continent, hitting the service sector in particular.
France’s PMI fell from 57.3 to 51.7 month-on-month as the country’s manufacturing sector suffered an unexpected setback. Germany’s service-sector weakness drove that nation’s August PMI down to 53.7 this month from 55.3 in July.
In France, the pace of layoffs has picked up this month; in Germany, the pace has slowed but layoffs continue.
After a historic 15-percent contraction during this year’s first two quarters, analysts had expected Europe’s economy to recover more steadily than it has.
The data “suggest that the recovery is already starting to fade, at least outside Germany’s manufacturing sector,” said economist Jessica Hinds at Capital Economics. “There’s a clear risk that it stalls or even goes into reverse.”
Britain has been the bright spot, with its composite PMI rising from 57 to 60.3 this month, its highest level in more than six years.
Japan’s PMI was flat at 44.9 from July into August.
Despite signs of strength, a steadily rising U.S. economic recovery is not guaranteed.
New claims for unemployment benefits rose back above one million during the week ended 15 August, and Boeing and other large employers continue to announce job cuts due in the weeks ahead.
TREND FORECAST: By the data, equites and economies are being artificially propped up across the globe. As we have continually forecast, the more cheap money pumped into the systems, the lower the value of currencies will fall and the higher gold and silver prices will rise.
