A discouraging report arrived Tuesday, showing US manufacturing weakened by more in September than economists expected. Manufacturing has been one of the areas of the economy hurt most by high interest rates, and the report from the Institute for Supply Management said demand continues to slow.
A separate report was potentially more encouraging. It showed US employers were advertising more than 8 million job openings at the end of August. That was slightly more than July’s number and better than what economists were expecting. A more comprehensive report on hiring will arrive on Friday, when the US government details how many jobs US employers created in September.
Besides the job market, another threat to the economy could lie in the strike by dockworkers at 36 ports across the eastern United States. It could threaten to snarl supply chains and drive up inflation if it lasts a while.
The workers are asking for a labor contract that doesn’t allow automation to take their jobs, among other things. So far, financial markets have been taking the strike in stride. Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.
On Wall Street, the majority of stocks were falling.
Signet Jewelers dropped 9 per cent after the diamond retailer said CEO Virginia Drosos is retiring, effective Nov. 4. The company named J.K. Symancyk, who was most recently the CEO of PetSmart, as her successor.
In the bond market, the yield on the 10-year Treasury fell to 3.75 per cent from 3.79 per cent late Monday. Yields fell after worries about the Middle East drove investors into Treasurys, gold and other investments seen as safer.
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Yields had already been easing worldwide following an encouraging earlier update on inflation from Europe. Inflation among the 20 countries that use the euro currency came in below 2 per cent in September for the first time in more than three years, and the slowdown could give the European Central Bank leeway to cut interest rates more quickly.
In stock markets abroad, European indexes swung from modest gains to losses. They fell 0.8 per cent in France and 0.6 per cent in Germany.
Farther east, a quarterly “tankan” survey by the Bank of Japan showed more large manufacturers are still feeling optimistic about business conditions than pessimistic. Japan also reported that its unemployment rate for August fell to 2.5 per cent from 2.7 per cent in July, in line with market expectations.
Japan’s benchmark Nikkei 225 rallied 1.9 per cent to claw back some of its steep 4.8 per cent loss from the day before.
Markets in China and South Korea were shut for holidays. Mainland Chinese markets, which had their best day since 2008 on Monday, will remain closed until October 7 for the National Day break.
AP
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