Manufacturing Advancements Amidst Falling Forecasts
The economic indicators appear to be somewhat mixed heading into summer. The most recent jobs report shows a much lower job growth than anticipated as 75,000 jobs were added by employers in comparison to the 178,000 job gains predicted. Additionally, the unemployment rate remains at a 50-year low of 3.6%. However, consumer confidence appears to be the highest since 2004. More mixed results can be seen in the construction spending, housing and machinery, and equipment orders. Construction spending remained flat while housing declined. New machinery and equipment orders fell more than forecasted, and this decrease in demand signals prolonged uncertainty while the trade war with China continues.
On another note, U.S. Senators Kirsten Gillibrand and Chris Coons intend to “bolster” advanced manufacturing with the release of a new bipartisan bill. With this legislation in place, job training programs will be revamped to improve opportunities for success in this industry. As a result, global competitiveness should increase, as our country should remain a top leader in the manufacturing industry from a global standpoint.
On June 6th, officials at the White House threatened to continue with the tariffs on all Mexican imports in hopes to better control the influx of immigrants from Central America to the U.S. Trump imposed a threat to order a 5% levy on June 10th and planned to increase it to 25% by October. In response, Mexico appears to be bolstering their efforts to assist in our immigration issue. Therefore, the Trump Administration has decided not to go through with this pledge.
Impact of Diesel Demand
Global investors have reason to believe China has been overstating official economic figures for years now. Growing suspicion has led economists to measure China’s productivity in other forms including diesel fuel demand and electricity. The demand for diesel fuel continues to fall as China experiences the repercussions of the trade war. Diesel demand, an indication of good transportation volume, has dropped 14% and 19% in the last two months. Lower demand for diesel fuel indicates that China is not transporting the vast quantity of goods as in previous months.
Analysts predict no future trade deal between the U.S. and China following the G-20 summit in Japan this upcoming month. Amid Trump’s increase in tariffs to 25%, China retaliated by threatening to cut off Beijing’s rare earth minerals. While both President Donald Trump and Xi Jinping, the General Secretary of the Communist Party of China, are expected to attend the G-20 summit, it will be shocking if the two sides reach common ground. If tensions continue to rise, changes in monetary policies for both China and the United States are predicted.