JP Morgan AM: The US economy might not be out of the recessionary woods yet
JP Morgan AM: The US economy might not be out of the recessionary woods yet
Recent survey data has sent conflicting signals about the strength of the US economy. On the one hand, the US S&P services purchasing managers' index (PMI) suggests that the world's largest economy remains resilient, with a strong print of 54.9 in May. Not all indicators, however, are painting such a rosy picture.
The ISM business surveys have been trending down and suggest that the risk of recession may be higher. History shows that, typically, the US ISM nonmanufacturing PMI tends to fall in unison with the ISM manufacturing new orders measure. Given that manufacturing new orders are firmly in contractionary territory, we may see the former follow suit. As such, we do not think that the US economy is out of the recessionary woods just yet.
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