Wednesday, 6 October 2004

Economic growth momentum still slowing

More indication that the world economic growth momentum is still slowing.

U.S. Services Sector Slips, Jobs Mixed
Growth in the vast U.S. services sector slowed in September, but mixed data on employment on Tuesday focused economists' attention on upcoming payrolls data to get a clearer sign about the outlook. The Institute for Supply Management's non-manufacturing index fell to 56.7 in September, its lowest level since May, 2003, and down from 58.2 in August. The number was below Wall Street predictions for an increase to 59.0...

The ISM survey's employment index rose to 54.6 in September from 52.5 in August. However, data from employment consulting firm Challenger, Gray & Christmas Inc. released on Tuesday painted a less optimistic portrait of U.S. employment. Employers announced 107,863 layoffs in September, an eight-month high and 41 percent higher than in the same year-earlier month. The other half of the Challenger report showed employer hiring announcements last month at only 16,166 new job openings compared with 132,105 job openings in August.

Things are little better in the United Kingdom.

Manufacturing shows sharp decline
The Office for National Statistics said that manufacturing output fell by 0.8 percent in August versus forecasts of a rise of 0.3 percent. That was the biggest decline since October 2002 and the first time manufacturing output has fallen for three months running in 2-1/2 years. That took the annual rise to just 0.4 percent from 0.7 percent in July.

With oil prices now at new records (US light crude has shot past US$51 a barrel -- see "Oil extends record run"), it's still far from clear that the world economy can regain much traction.

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