Manufacturing Momentum, Growing Debt Levels, and a COVID-19 Check In

The ISM Manufacturing PMI report showed a modest improvement last month, narrowly beating analyst expectations and (hopefully) establishing some upward momentum. The sector has been struggling since mid-2019 and it’s fledgling recovery earlier this year was cut short by the COVID-19 outbreak—let’s hope these gains have more staying power. Government stimulus has proved a useful weapon in cushioning some of the economic effects of the virus, but the massive wave of debt being incurred could spark its own eventual crisis; the U.S. is projected to see a 157% debt-to-GDP ratio by 2021. Increased unemployment payouts—while essential to many’s survival in the current environment—are certainly a factor in the growing debt and may also cause issues down the line, given how many low-income workers are taking home more from unemployment than they were in their paychecks. The system certainly isn’t perfect, as highlighted by a new report from Bloomberg claiming that nearly 33% of benefits owed to those who lost their jobs in the pandemic have yet to be paid out. Meanwhile, infection rates are not slowing as much as hoped in the U.S., and are spiking in many parts of the Middle East—in some cases for a second time.  Is the U.S. prepared for our own second wave?