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WASHINGTON The pace of growth at US factories slowed in September, a sign that the chill falling over the global economy could complicate the Federal Reserves plans to raise interest rates.
Other data on Thursday pointed to a tightening labor market and stronger spending on home construction, highlighting the split in the economy between strong domestic growth and weakness abroad.
This is causing headaches at the Fed, which cited concerns last month about global economic and financial developments when it surprised much of Wall Street by holding off on hiking rates.
The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.2, its lowest since May 2013 and just below the median forecast in a Reuters poll.
While any reading above 50 indicates expansion in manufacturing, growth has slowed sharply over the last year as a strong dollar has crimped exports.
More recently, a slowdown in China is dragging on global growth. The ISMs index for exports held steady at 46.5, marking a contraction in activity for the fourth straight month.
The dollar drifted lower while yields on Treasury debt also declined. Wall Street stocks were trading lower.
Despite the weakness abroad, Americas domestic economy and the labor market have appeared on more solid footing, which has boosted expectations the Fed could hike rates this year or in early 2016.
The Labor Department said the number of new applications for US jobless benefits rose modestly last week, although they remained near 15-year lows and a gauge of the trend in claims fell.
Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 277,000 for the week ended Sept. 26.
Filings at this level are incredibly low by historical standards, speaking to how tight labor markets are getting, said Stephen Stanley, an economist at Amherst Pierpont Securities.
Small businesses added 0.18 worker per firm in September, the best growth this year, the National Federation of Independent Business said in a report. Americas monthly employment report due on Friday is expected to show 203,000 positions added to payrolls last month, a pickup from the pace in August.
US construction spending climbed in August to the highest level since 2008, the Commerce Department said in a separate report. The gains were boosted by a surge in outlays for residential projects and gave a sign the housing market was helping the overall economy.
In another sign of domestic strength, the big three US automakers - General Motors Co, Ford Motor Co and the US operations of Fiat Chrysler Automobiles NV - reported a jump in September sales as cheap gasoline and ultra-low interest rates drove demand for sport utility vehicles and pickup trucks.
(Reporting by Jason Lange in Washington; Additional reporting by Sam Forgione in New York; Editing by Andrea Ricci)
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If you want to understand whats happening with the global economy right now, then all you need to do is look at some of the data that came out in the last 24 hours.
As it stands,there are two, big opposing trends in the world economy. The first is that much of the world, particularly China and the emerging markets, is currently in slowdown mode. The other is that the USdomestic economy, particularly the consumer, is a beast.
Lets talk about the global growth story first.
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Americas economy is experiencing a fast, permanent shift towards self-employment across nearly every industry. Even as unemployment continues to decline, currently holding at a 2015 low of 5.1 percent, the independent workforce holds strong at 30.2 million Full- and Part-Time workers aged 21 and over. Add in Occasional Independents, those workers who do independent work on a non-weekly basis, and this number rises to an impressive 42.1 million strong.
Despite fears that independent workers would return to traditional employment as the economy recovered from the Great Recession, the independent population continues to grow -- nearly twice as fast as US employment, according to MBO Partners 2015 State of Independence in America, the industrys only comprehensive dive into five years of independent workforce data.
Were in the middle of a sea change in how American employment works, and thats a very good thing.
As the traditional stability of employment has declined, its increasingly up to the individual to ensure his or her own employment security. The primary reason independent workers give for their choice is that working for themselves means they are not under the control of a single employer or boss. In fact, 43 percent of Full-Time Independents say they are more secure working independently, up from 33 percent in 2011. This may be due to the fact that the average independent has four or more clients to diversify financial risk.
The 2015 State of Independence finds that 79 percent of independent workers said they are happier working for themselves than in traditional jobs. And while the numbers are impressive, in a way they arent surprising, given that the average full-time independent worker earns more than the average American in a traditional job. What is surprising to many people is that income barely cracked the top five most commonly cited reasons that full-time independents said they chose to go out on their own. Far ahead of income were controlling my own schedule, more flexibility, being my own boss, and doing what I love.
In fact, there is widespread interest among the general population in going solo --1 in 7 non-independent Americans at least 21 years old are considering the move.
Independent work been widely reported on in the media, although the discussion has mainly centered around the pros and cons of the On-Demand Economy, highlighting well-known companies like Uber and new breeds of startups alike that promise nearly any service or good at the push of a button or tap of a smartphone. I champion these innovations and the freedom for people to work on their terms.
Weve seen the dark side too; stories of misclassification costing employers tens of thousands of dollars and the growing ranks of Unsatisfied Independents who report that theyd rather be traditionally employed. This is true as well: independent work is not for everyone, and employers must increasingly seek to engage non-traditional workers compliantly.
Theres no denying that independent work is a major positive contributor to the economy -- the revenues of American independents hit $1.15 trillion in 2015. This staggering figure represents 7 percent of US GDP. If the independent workforce were a country, its Gross Independent Product would be almost equal to the GDP of Mexico.
Americans have always been known for their entrepreneurial spirit, and the growth of self-employment reinforces this idea. 2.8 million current independent workers (16 percent of the total Full-Time Independent workforce) plan on building bigger businesses in the next few years, creating a major pipeline of future employers in the US economy.
Should independents grow at the same rate as they do today, the ranks of the self-employed will grow 26 percent to hit 38 million independent workers by 2020. Add in the subset of occasional independent workers, and those numbers swell to a massive 54 million, nearly 45 percent of the total non-farm US workforce.
Independence represents a major change for America, and one that the data and analysis show is positive for both those directly involved and the country at large. As we move in to the 2016 elections and beyond, I challenge lawmakers to find better ways to adapt and serve this new 21st century independent economy.
This is what innovative Independent Workforce Solutions like those provided by MBO and others emerging in the market are already doing. In fact, the very need to support this new workforce is creating a new industry of its own supporting more jobs, deploying more capital and enabling Americans to do work they love, when and where they want.
The future of work is already here, and the innovation and entrepreneurship it will unleash are unprecedented. Will the trend towards independence continue? All signs point to yes.
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The revenue that Saudi Arabia generates from oil could be overtaken by tourism one day, according to tourism industry experts and economists.
Speaking on the rapid growth of tourism to the country at an event organized by the Saudi state, economists and experts said that tourism and national heritage are the sectors most likely to become pillars for Saudi Arabias future economy -- one that is currently predicated on oil exports.
Tourism represents the second most important economic sector in the Kingdom, said economic analyst Fadl Saad Al Bu Ainaian, according to a release from the organizers of Wednesdays event, the Saudi Commission for Tourism and National Heritage (SCTNH).
Despite its low contribution to the gross domestic product (GDP) of only 2.7 percent, development plans in tourism show its ability to raise its contribution to higher levels, and makes it more capable to develop targeted areas especially the rural and remote areas that need comprehensive economic development to create jobs and investment opportunities, he economist added.
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The US economy is all about consumers.
On Tuesday, consumer confidence beat expectations while advance data on US trade in August showed a 3.2% decline in the nominal value of exports, which are down 10.4% over the prior year.
The decline in exports reflects a hit from the twin impacts of a decline in oil prices and a strong US dollar. For US consumers, however, these are major tailwinds.
So despite the downbeat news on exports, the US economy still remains poised to grow 2.6% this year, which would be its best year since 2006 as the economys most powerful force -- consumers -- enjoys the spoils of low oil prices and more purchasing power because of the strong dollar.
This chart, which comes to us from Doug Porter and the team at BMO, neatly sums up the diverging fortunes of the US economy: exports down and consumer spending up. And on balance, this is great news for America.
That stark dichotomy between the fortunes of consumers and exporters is playing out in a variety of stats and company results, Porter writes. Despite the conflicting noises, just note that GDP is likely to grow 2.6% this year, its best year since 2006. The US consumer remains a powerful force.