US manufacturing rebounded in July, as it follows the pattern repeated over the past four years.
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| Source: Markit |
Markit's report however emphasized caution:
Chris
Williamson, Chief Economist, Markit: - The U.S. manufacturing sector picked up
momentum again in July, with output, order books
and employment all growing. The goods-producing
sector acts as a bellwether of the wider economy,
and the upturn in July therefore bodes well for the
pace of GDP growth to have picked up again in the
third quarter after a likely easing in the second
quarter.
The pace of manufacturing growth nevertheless
remains well below that seen at the start of the
year, in part reflecting weaker demand from many
export markets, notably China and other emerging
economies. Employment growth is disappointingly
weak as a result, as firm focus on cost-cutting to
boost competitiveness.
This stabilization in manufacturing will add to the ammunition for the more hawkish members of the FOMC, who will argue for a reduction in securities purchases starting in September.
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