Slowing global growth and continuing foreign trade disputes were the main reasons that the index of activity in the industrial sector, defined by the Institute for Supply Management, fell from 52.1 points in may to 51.7 in June.
In principle, while it is above 50, it indicates the development of the industry, but, as noted by Timothy Fiore, Chairman of the ISM Committee on the study of business taking place testifies to the increase of negative factors.
However, the problem, according to indexes IHS, Markit, the industry is everywhere — including in Europe and Japan. Although the situation is deteriorating in the U.S., the overall Outlook for 2019 is more optimistic than for most developed countries. It is associated primarily with the activity of the American consumers who benefited from low unemployment and wage growth, and, according to most experts, the gross domestic product this year will increase by approximately 2%.
As noted Ian Shepherdson of Pantheon Macroeconomics of the company, the main source of instability is the trade policy of the White house, may 30, which threatened to impose duties on goods from Mexico, but on June 7 rejected this plan. Relations with China have recently become less sharpened, allowing to stabilize the situation. Nevertheless, industrial companies continue to reduce the size of the investment and are looking for new supply routes. So it’s unlikely that in this situation the Federal reserve will continue raising interest rates.