US jobs market performance quiets recession fears

Fears of an imminent recession in the world’s largest economy – the United States, which reached a fever pitch over the summer, seemed to have quieted for now with consumers still spending and employers hiring.Latest Labour Department figures showed employers added 128,000 jobs in October, and revisions to prior months’ data tacked on another 95,000. And the unemployment rate ticked up to 3.6%, still near a half-century low.Stocks also rose Friday after the report reassured investors about the health of the economy, with the S&P 500 reaching a record high, according to the New York Times. October’s manufacturing purchasing managers’ index from the Institute for Supply Management was weak but better than feared and new Orders – the critical component – did not slip.China manufacturing was also much better than expected.That said, trade tensions are needlessly roiling financial markets, which could eventually destabilise stable economies around the globe, analysts say. Purchasing managers’ index reports from the United States, Japan, South Korea and the United Kingdom, among others, showed the global uncertainty spawned by trade spats and Brexit continued to keep a lid on factory output.Publicly, some finance ministers and central bank governors have held off on raising fears that a global recession is coming — but in private, international and national officials are not nearly so certain. The communique issued at the end of the IMF and the World Bank’s annual meetings in Washington last month agreed that the global economy is not slipping into recession.The IMF broadly defines a world recession as growth slipping below 2.5% a year. This is still far from the fund’s base case. Although the global economy is experiencing its weakest performance since the financial crisis — because trade wars have knocked confidence, investment, trade and manufacturing — the IMF expects a pick-up next year.In the US, the Institute for Supply Management said its widely followed manufacturing PMI ticked up in October from a 10-year low in September, but activity slowed overall for a third straight month.“Global trade remains the most significant cross-industry issue,” said Timothy Fiore, chair of ISM’s manufacturing business survey committee.The ongoing Brexit saga was again a factor in Britain, where a renewed rush to stockpile ahead of another aborted UK departure deadline limited losses for British manufacturers, though not by enough to prevent a sixth month of contraction, said a Reuters’ dispatch.In China, meanwhile, a private sector report on Friday showed a surprising pick-up in China’s factory activity, but this was in contrast to an official factory gauge the day before that pointed to further deterioration.According to an August report, growth in the world’s biggest economy – United States will average 2.3% this year, down from 2.5% seen in a July survey. Gross domestic product expansion is forecast to slow to a 1.8% annualised pace in the third quarter, from 3.1% in the first three months of the year and 2.1% in the second quarter. Some economists see the US entering its next recession in 2021, although others say such fears are unnecessary and without any basis.