More signs of a slowdown in the Chinese economy may not be enough to overcome a potential slowdown in U.S. oil output. The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index fell to 47.0 in September, its lowest since March 2009 yet only down slightly from last month. The weakness was well telegraphed by other readings but how well telegraphed was the drop in U.S. oil inventories?
The highly regarded former chairman of the Federal Reserve, Paul Volcker, has severely criticized the state governments in the U.S. over “faulty practices” used to devise budgets which mask the true financial position of those states.
Stronger demand for goods and services is prompting companies to hold the line on firings and expand headcount. Continued progress in the labor market will be needed to boost aggregate income and drive consumer spending, which accounts for almost 70 percent of the economy.