On Tuesday, the 8th of October 2019, data released by US Labour Department on GMT 18.30, added further glooms on United States’ slowing economy, as the world’s largest economy, enjoying a record streak of expansion entering into its 124th straight month, had witnessed an unexpected plunge of its producer price index, which reported its smallest annual increase in more than three years, building a bolstered case for the US Fed to slash interest rate for the third time this year as early as October’s FOMC meet.
In point of fact, Tuesday’s (October 8th) US labour department data that reported a steep downsize of US producer price index to 1.4 per cent last month from a 1.8 per cent rise on August, was brought into light against a baleful economic backdrop of the world’s largest economy, which reported a dwindling of its manufacturing activity to a decade low figure last month and a faltering of US Service sector activity, accountable for two-third of United States’ entire gross domestic product, to a three-year low figure.
According to PPI (Producer Price Index) data released by US Labour Dept. earlier on Tuesday (October 8th), US PPI grew at its slowest pace since November 2016, missing an analysts’ estimate who were expecting a rise of 0.1 per cent.
Meanwhile, addressing to a US economy that is muffling to mead a robust stance amid growing trade uncertainties across the globe, which would likely to build a stronger case for a divided US Fed on rate-cut issue, a chief economist at MUFG in New York, Chris Rupkey said on Tuesday (October 8th), “This is helping to build the case for the Fed to take out some more insurance to guard against a broader downturn in the economy.
The trade war is hurting margins and pricing power for manufacturers, making it hard to see how America is winning this trade war with the world. ”