Will Supply Chains Feel Impact of Interest Rate Spike?

According to the Institute of Supply Management, July was another solid month of jobs gains

Subscriber: Log Out

As noted here recently, the nation's non-manufacturing sectors – which account for about 80 percent of employment – are reporting the fastest jobs increases in a decade.

But many supply chain managers may wonder: With jobless claims at near a four decade low, what are the implications for a spike in interest rates and subsequent impact on supply chains?

According to the Institute of Supply Management, July was another solid month of jobs gains, and is consistent with other strong data on the labor market. Indeed, jobless claims are near a four decade low.

Analysts at IHS Global Insight say these data are consistent with an underlying growth rate in the economy of 2.5 percent to 3.0 percent and suggest that U.S. companies are shrugging off bad news in the rest of the world.

IHS Global Insight's chief economist, Nariman Behravesh, says there are implications for the first Fed rate hike:

“If the Fed was looking for further reasons to begin raising interest rates in September, it found plenty in the July report,” he said.

He pointed to decent payroll gains, an increase (albeit small) in the labor force, a bounce in manufacturing jobs, and growth in wages (albeit still tepid).

“That said, a labor force participation rate that remains at a 38-year low and wage gains that could be signaling more slack in the labor market don't make a September rate hike a slam dunk,” Behravesh concluded.

SC
MR

Latest Resources
Unlock the Future of Forecasting with Hybrid AI Demand Forecasting
Download our new white paper to discover how Manhattan’s Unified Forecast Method with Artificial Intelligence (UFM.ai) tackles these…
Download

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson

Patrick is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].

View Patrick 's author profile.

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release