The release of the latest FOMC meeting minutes showed that officials were concerned about signs of a global economic slowdown, but did not believe that it “materially altered” the outlook for the US. “Nevertheless, in part because of the risks to the outlook for economic activity and inflation, the committee decided that it was prudent to wait for additional information,” according to the minutes.
The trade deficit jumped 16% in August to $48.3 billion, as a strong dollar drove exports down 2% to the lowest level in three years. The trade deficit with China rose 14.4% to $32.9 billion and the gap with the European Union increased 17% to $14.5 billion.
Source: Census Bureau
Consumer borrowing increased at a solid pace in August, as Americans took out auto and student loans. Credit rose by $16 billion for the month, reaching a new record of $3.47 trillion. Auto and student loans rose by $12 billion, and credit card borrowing rose by $4 billion.
The service sector slowed in September, as the ISM non-manufacturing index slid to a three-month low of 56.9%, signaling that the sector is not immune to the problems hitting manufacturing. Measures of business activity and new orders both slipped, while a gauge of employment rose.