The U.S. economy plunged at an annual rate of 31.7% during the second quarter under the weight of the coronavirus pandemic. This is the sharpest quarterly drop on record, the previous worst drop was a 10% loss in 1958. A hiring bounce-back in June suggested that the economy began to recover. However, economists say a full recovery is still far off as the virus has yet to be contained.
Unemployment in the U.S. fell to 8.4% as the economy added 1.4 million jobs in August. While August’s payroll gains were healthy, it still marks the second straight monthly slowdown in hiring after a record 4.8 million positions were added in June.
The Architecture Billings Index registered a score of 40 in July, unchanged from June, as a majority of architecture firms continue to report a decline in their firm’s billings. A score below 50 indicates a decline in billings.
However, the Purchasing Managers Index saw a 1.8 percentage point increase in August with a reading of 56%. This indicates expansion in the overall economy for the fourth consecutive month. The New Orders Index increased 6.1 points to 67.6% in August and the Production Index increased 1.2 points to 63.3% compared to July.
The Consumer Confidence Index decreased in August after also declining in July. The Index now stands at 84.8. However, consumer spending has rebounded in recent months.
The Steel Industry
The Trump administration is working to curb steel imports from Brazil and Mexico, boosting protections for battered U.S. steelmakers and jobs in the election battleground states of Pennsylvania, Ohio, and Michigan. The U.S. Trade Representative’s office said it was reducing Brazil’s remaining semi-finished steel imports quota for 2020 in light of recent deterioration in market conditions due to COVID-19. Mexico also agreed to establish a strict monitoring regime to address surges of exports to the U.S.
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