“Global manufacturing and construction sectors have already entered a downturn; the service sector is all that now stands between the economy and a full-blown recession.
“Global manufacturers reported new export orders fell for a 10th month running in June, with the most widespread decline for six years, according to the JPMorgan global purchasing managers survey.
“Even in the United States, which has escaped relatively mildly so far from the downturn hitting Europe and Asia, there are now clear signs growth has stalled across the manufacturing and construction industries…
“…it is not clear whether early and aggressive rate cuts will be enough to avoid a recession. Rate cuts successfully extended the economic expansion in 1995/96 and 1998 but not in 2001 and 2007.
“Policymakers’ concerns about the worsening manufacturing slowdown and its potential to spill over into the rest of the economy explain why the United States reached out to China last month to restart trade talks.
“Global growth is now too weak to absorb any more serious shocks without sliding into a much more serious downturn.”
“The UK economy has suffered its first quarterly contraction in seven years, a closely watched survey suggests, as the looming threat of a no-deal Brexit paralyses business activity.
“Growth in the UK’s dominant services sector came to a near standstill in June, confirming a gloomy outlook for a month in which the manufacturing and construction industries plunged into reverse.”
“The number of babies born in Italy hit a new record low in 2018, the population shrank and the average age crept higher, national statistics office ISTAT said on Wednesday.
“Italy’s demographic crisis, with a shrinking population and ageing workforce, is one reason for its chronically stagnant economy, economists say — and the situation is getting worse.”
“Builder loans are under the lens. This is the illiquid, opaque part of the real estate business that’s simultaneously the biggest employer in India and thrives on financing from beyond the official bailiwicks.
“In effect, therefore, builder loans could well be India’s own subprime… The contraction is a clear reflection that borrowing short and lending long can’t continue for eternity.”
“The world’s largest car market is grappling with a sharp slowdown… Now, China is making auto financing even more accessible. Given the car sector contributes around 4 per cent to nominal gross domestic product, this makes sense. But with the country’s financial system teetering, the wisdom and timing of this decision is questionable…
“Yet again, China is returning to credit to solve its problems.”
“A gauge of U.S. service industries dropped more than forecast in June to the weakest in almost two years, led by a cooling in employment that may further temper optimism about the labor market heading into Friday’s jobs report.”
“First-half job cuts were at their highest level since the first half of 2009, according to new research. Jobs outsourcing firm Challenger, Gray & Christmas has kept layoff data by month for years.
“Its researchers wrote, “So far this year, employers have announced plans to cut 330,987 jobs, a 35% increase from the 245,179 cuts announced through the first half of last year. This year marks the highest first-half total since 2009…”
“Inventories fell less than expected as U.S. refineries last week consumed less crude than the week before and processed 2% less oil than a year ago, the EIA data showed, despite being in the midst of the summer gasoline demand season.
“That suggests oil demand in the United States, the world’s biggest crude consumer, could be slowing amid signs of a weakening economy. New orders for U.S. factory goods fell for a second straight month in May, government data showed on Wednesday, adding to the economic concerns.”
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