Thursday 2 August 2012

No action from Fed as global manufacturing weakens

At the end of its latest monetary policy meeting, the Federal Reserve announced that economic activity has decelerated but did not introduce any new stimulus.

US economic data on Wednesday had been mixed. US construction spending rose 0.4 percent in June after an upwardly-revised increase of 1.6 percent in May and ADP reported that private employers created 163,000 jobs in July but the Institute for Supply Management's manufacturing PMI stayed below 50 at 49.8 in July, slightly up from 49.7 in June. Markit's manufacturing PMI stayed above 50 but fell to 51.4 in July from 52.5 in June.

Manufacturing was also mostly weak in the rest of the world.

In the euro area, Markit's manufacturing PMI fell to a 37-month low of 44.0 in July from 45.1 in June.

In the UK, the Markit/CIPS manufacturing PMI fell to 45.4 in July, the lowest reading since May 2009, from 48.4 in June.

In China, the manufacturing PMI from the National Bureau of Statistics and China Federation of Logistics and Purchasing fell to 50.1 in July from 50.2 in June while HSBC's PMI rose to 49.3 from 48.2.

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