The economy was on a roll as the second half began, with much of this strength apparent in the manufacturing and non-manufacturing areas. The gains shown by these broad industrial and consumer categories were especially noteworthy in new orders and production.
Continuing economic tensions with China are front and center on Wall Street these days, with our fraught commercial dealings with that fast-growing nation in the headlines almost daily.
The first half is ending on a high note, with strong progress being made in reducing the unemployment rate, in narrowing the trade imbalance (with the deficit declining sharply in March and April), and in boosting retail spending (with sales coming in well above consensus forecasts during May).
May’s uplifting jobs report helped to turn around a stock market that had come under duress from global headwinds. To wit, the government’s survey showing a 223,000 increase in jobs in May, an 18-year low in unemployment, and a 2.7% rise in average hourly earnings over the past year was greeted warmly on Wall Street, with stocks rising for several days on this news.
Geopolitics are taking center stage on Wall Street these days, with the on-again, off-again summit with North Korea, the intensifying trade standoff with China, and the political and economic dramas unfolding in Italy and Spain topping the list of current global headwinds.
Employment growth slowed as the old year concluded, with the nation creating just 148,000 jobs in December. That was below both consensus and the 252,000 jobs added in November. Also, the labor-force participation rate remained at an unimposing 62.7%.
The economy is starting out the new year in fine form, extending the positive momentum in place since last spring. For example, recent weeks have seen strength in a range of housing categories, holiday sales, and manufacturing across the nation, with this latter sector buoyed by gains in new orders, production, exports, and pricing.
The employment outlook is improving, with data issued last week showing another strong monthly jobs increase. In all, the nation added 228,000 positions last month, which suggested that much of the nation had recovered from the devastating effects of last summer’s hurricanes.
The economy’s forward momentum remains in place as we approach yearend, with worker productivity (the highest in three years), trends in retailing (including vehicle sales, which were helped by Black Friday deals and strong consumer confidence), and activity in major industrial categories (particularly manufacturing) all pointing to further moderate gross domestic product
The outlook is brightening as we hit the home stretch of 2017, with the nation quickly regrouping following the succession of deadly hurricanes that struck early in the second half.