Economic growth remains uncertain in the United States, even though financial markets are showing traces of improvement after recent injection of liquidity. The Federal Reserve should stay nevertheless caution by keeping rates as low as possible for the next few months. The European economy, at the contrary, maintains the positive momentum, with tangible signals of moderation, but the Euro must act promptly from recent levels to avoid a deeper downside correction.
Growth is slowing in the United StatesIn September, the Institute of Supply Management (ISM) manufacturing declined slightly to 52 (52.50 expected) from 52.9. It remains in expansionary momentum, although the contraction has been broad based. In fact, production measure fell to 54.6 from 56.1, while the new orders index slid to 53.4 from 55.3. Employment moved instead up to 51.7 from August¡¦s 51.3. The non-manufacturing ISM fell to 54.8 in September from August¡¦s 55.8 matching expectations, but remains in a strong uptrend. The new export orders index declined to 50 from 53.5 and the new orders index slipped to 53.4 from 57. Finally, the employment index rose to 52.7 from 47.9. Both index testifies a still positive economy in the United States, albeit moderating in some sectors.
Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
- Growth is slowing in the United States
- The European economy is on target for now
- An important week for the European currency
8/10/2007
