US manufacturing contracted further in September as output and new orders dropped amid weak demand and political uncertainty.
The US manufacturing sector continued to slide deeper into contraction at the end of Q3, with sharper declines in output and new orders in September, driven by weak demand and political uncertainty. Employment experienced its steepest drop since early 2010, excluding the pandemic period. However, business confidence increased slightly, driven by optimism for post-presidential election improvements.
While input cost inflation eased somewhat, it remained notable, and firms increased their selling prices at the fastest pace since April. The seasonally adjusted S&P Global US Manufacturing PMI dropped to 47.3 in September from 47.9 in August, marking the third straight month of deteriorating conditions and the worst since June 2023.
Source: S&P Global PMI. ©2024 S&P Global.
The US Dollar Index hovered near 99.4 as weak GDP and revived Trump tariffs added uncertainty. Fed’s Daly signaled possible 2025 cuts but urged patience. The euro steadied near $1.13 on soft inflation in Spain and France, increasing ECB cut expectations. The pound stayed around $1.35 amid UK trade optimism and pension reform plans. Weak US data supported Fed cut bets. The yen weakened despite strong Tokyo inflation, with some support from safe-haven demand. A BOJ hike is expected in July.
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