US economic output accelerated in July, returning to its historical trend rate, according to this morning’s update of the Chicago Fed National Activity Index’s three-month average (CFNAI-MA3). The benchmark’s rise to 0.0 marks the strongest pace of growth in six months, based on CFNAI-MA3.
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The global markets are predicting that the macro trend is turning ugly. In China, which is ground zero for the latest round of worries, it’s clear that growth is slowing. Given the size and influence of China’s economy, the fallout could be substantial. Does this mean that a new recession is destiny for the US? It’d be foolish to dismiss the threat that’s brewing. But it’s also clear that there’s still a positive tailwind blowing for the world’s largest economy through July. The key question: How will the trend compare in August? A compelling answer, one way or the other, will take several weeks at the earliest. Next week’s August report on nonfarm payrolls, for instance, will be a critical number for deciding if the trend is deteriorating. Meantime, let’s summarize what the numbers are telling us about the US macro trend to date.
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● Stocks continue falling on Monday in China and Europe
● NABE: Economists think Fed rate hike will be delayed
● PMI: US mfg growth slows to 22-month low in August
● Eurozone growth ticks higher in August via Composite PMI
● Consumer confidence in Europe posts a slight rise in August