In March, US manufacturing activity had surprising dropped despite a strong labor market and wage growth, pointing towards a troubling sign that the economy might soon have joined China, Italy & Germany, whose economy had already shown a substantial scale of slowdown signs.
Never the less, US housing market had been marginally higher in March, as a lower interest rate had been proffering them a boost. According to Financial data firm Markit’s purchasing managers’ index released this week, the US manufacturing had fallen to 52.5 in March, remarking its lowest level since June 2017, while both new orders, alongside outputs were moderated.
In fact, analysts had been expecting the US PMI (Purchasing Managers’ Index) to surge to 53.6 from previous 53.0, while the recently revealed data had widely missed analysts’ expectation triggering further worries of a economic slowdown, and a purchasing managers’ index below 50.0 had been considered as a technical recession.
The recent report had also inverted the 10-year note yields to invert for the first time since 2007 and an inverted yield curve had widely been considered as a leading determinant of recession. Some economists had been quoted saying following the release that the Fed might have lifted the rates too high in 2018, which would likely to keep the US economy at a dismal state in 2019, unless a rate cut had been introduced soon enough.