Purchasing managers index:

The PMI for July indicated a continued contraction in the manufacturing sector, with a reading of 48.6, down from 49.0 in June. This marks the third consecutive month of contraction, driven by declining new orders and production. Supply chain disruptions have lessened, but demand remains weak, reflecting broader economic uncertainty.

Unemployment rate:

The unemployment rate in July 2024 rose to 4.3%, up from 4.1% in June. This increase is partly due to temporary layoffs. The labor market is showing signs of it declining, with a slowdown in job creation and a decrease in the number of job openings. Despite this, sectors like healthcare and construction continued to see employment growth.

Non-farm payroll:

July 2024 saw an addition of 114,000 jobs, below market expectations of 175,000. This slowdown in job growth, along with the rising unemployment rate, shows weakness in the laboring market. Wage growth also decreased, with average hourly earnings increasing by just 0.2% month-over-month, indicating and increase in prices.

Market outlook:

The financial markets reacted to the mixed economic signals with increased volatility. The likelihood of a Federal Reserve rate cut in September has risen, given the moderating labor market and softer inflation data. The overall outcome shows that markets will begin to slow down as statistics show a continuous decline which will most likely lead to the US claiming that we are in a recession.