EuroWire November 2019

Transatlantic Cable

Image: www.bigstockphoto.com Photographer Adrian Grosu

Job gains averaged 172,000 per month in the rst half of 2019. This was below the monthly average of 223,000 in 2018, but was felt to be due to a shortage of quali ed workers. Overall, the unemployment rate held steady at 3.7 per cent in July while job gains continued above the 100,000 per month necessary to keep pace with the growth in working age population. Daniel Silver, an economist at JP Morgan, commented: “The trend in job growth likely has slowed to some degree. But the claims data signal that any softening in the labour market is likely to be modest, and don’t point to any sort of substantial downshift in activity.”

Manufacturing

Industry and government reports showed that US manufacturing activity slowed to a near three-year low in July

Spending on private construction projects dropped to its lowest level for 18 months; data from the Commerce Department showed construction spending had dropped 1.3 per cent in June, the biggest decline in seven months, after falling 0.5 per cent in May. The Federal Reserve made a pre-emptive move on the slowing market and, on 31 st July, announced the rst cut in interest rates since 2008. Jerome Powell, chair of the Federal Reserve, said that the rate drop was intended to help, but was not expected to mark “the beginning of a long series of rate cuts.” The Institute for Supply Management (ISM) July index of national factory activity fell for the fourth consecutive month to 51.2, from 51.7 in June. An ISM index reading over 50 shows expansion in the manufacturing sector. Economists polled by Reuters had expected the ISM June index to be up to 52.0. Import tari s continued to disrupt supply chains with particular e ect on manufacturing, which accounts for around 12 per cent of the US economy. The slow take-up of manufactured goods meant that businesses were placing fewer new orders with suppliers. However, the ISM new orders index rose to 50.8 in July, an increase from 50.0 in June, though factory employment fell to 51.7 from 54.5 in June. Labour market standing rm On 1 st August, a Labor Department report showed initial claims for state unemployment bene ts rose 8,000 to a seasonally adjusted 215,000 for the last full week of July. This was higher than the anticipated gure; economists had estimated 214,000. Claims data, however, was not necessarily an accurate re ection of employment patterns: according to a Reuters survey of economists, non-farm payrolls increased by 164,000 jobs in July, hot on the heels of a 224,000 increase in June.

Broadband

US broadband capex growth propels deployment

Posted on The Broadband Association’s website, ustelecom.org , Patrick Brogan, vice president for industry analysis at USTelecom, provides an overview of his organisation’s latest research on 2018 broadband capital expenditures and its analysis of 2017 FCC broadband deployment. Key ndings of the research were said to be that the US broadband industry – wireline, wireless and cable providers – has made capital investments totalling over $1.7 trillion since 1996; broadband providers invested approximately $80 billion in network infrastructure in 2018; and annual capital investments have grown for the last two years, following a two-year decline from 2015-2016. In 2017, broadband provider capital expenditures reversed the two-year decline that began in 2015, when a drop of $500 million accelerated to a $2.7 billion decline in 2016. Annual broadband provider capital spending was over $3 billion lower in 2016 than at its previous peak in 2014. By contrast, broadband provider capex grew $3 billion in 2018. Overall, 2018 broadband provider capital expenditures were around $5 billion higher than 2016 and exceeded the peak of $78 billion reported in 2014.

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November 2019