Our view on the US for August

The S&P 500 was mainly flat in August although it hit a new all-time high of 2,190 midway through the month. US consumer confidence rose to the highest level in nearly a year, suggesting that household spending will remain a key support for the economy. The Conference Board’s consumer-confidence index climbed to 101.1 from 96.7 in July, the highest reading since September 2015. Economists surveyed by The Wall Street Journal had expected an August reading of 97.0. However, The US services industry is growing at its slowest pace in six months, as uncertainty ahead of November’s presidential election is beginning to hamper the world’s largest economy.
Markit’s purchasing managers’ index (PMI) for the sector came in at 50.9 in August, down from a score of 51.4 in July and hovering perilously close to the crucial 50 mark which separates growth from contraction. 
Hiring cooled in August but remained consistent with steady US job growth. Non-farm payrolls rose by a seasonally adjusted 151,000 last month, revisions showed US employers added 1,000 fewer jobs in June and July than previously estimated. The unemployment rate, calculated from a separate survey of American households, was 4.9% in August, unchanged from July. We still remain cautiously underweight.

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