Market Analysis From Shawn DuBravac, Global Electronics Association Chief Economist
The labor market cooled further in August, with nonfarm payrolls adding just 22,000 jobs and the unemployment rate climbing to 4.3%. Manufacturing was particularly weak, shedding 12,000 jobs during the month. Survey data confirmed the slowdown, with the S&P Global flash Manufacturing PMI easing to 52 in September from 53 in August. Still, some resilience remains: durable goods orders surged 2.9% in August, though shipments dipped 0.2%, suggesting uneven demand momentum.
Across the Atlantic, the European Central Ban kept rates unchanged in September, leaving the deposit rate at 2% and the main refi at 2.15%. With euro area inflation at 2.1% in August, officials sounded comfortable but noncommittal about what comes next.
Manufacturing conditions showed renewed weakness in Europe as the HCOB flash Manufacturing PMI slipped back below the 50 mark in September to 49.5, signaling contraction. Production data painted a more nuanced picture. Industrial output in July rose 0.3% month-over-month, driven by durable goods.
China’s manufacturing sector continued to show divergent signals. The official NBS manufacturing PMI came in at 49.8 in September, a sixth straight contraction but slightly better than August. The private Caixin gauge told a different story, rising to 51.2, its quickest pace since March. The PBOC left loan prime rates unchanged in September, while Beijing mapped out roughly ¥500 billion in targeted financing to speed up investment projects. One clear positive was profits. Industrial earnings jumped 20.4% year over year in August, lifting year-to-date profits to a small gain after earlier declines.
Around the rest of Asia, the Asian Development Bank nudged its 2025 growth outlook for developing economies down to 4.8%, citing tariffs and trade uncertainty. Japan struggled, with August industrial output down 1.2% and the au Jibun Manufacturing PMI slipping to 48.4 in September. The Bank of Japan held its policy rate at 0.5% and kept a close eye on wages and prices. India remained the regional standout. GDP grew 7.8% year over year in the April to June quarter, and manufacturing stayed strong even as the HSBC/S&P Global PMI eased to a still-hearty 58.5 in September.
