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Hicks: As manufacturing slows, aggregate economy expands

The latest jobs report is certainly evidence that the aggregate economy continues to expand, despite a very clear slowdown in manufacturing, says Michael Hicks, an economist at Ball State University.

Nonfarm payrolls rose by 128,000 in October, exceeding the estimate of 75,000 from economists surveyed by Dow Jones. The nation’s unemployment rate rose from 3.5 % to 3.6%, but continues to be hovering at the lowest in 50 years.

“Recent economic data on goods producing sectors reinforces the growing evidence of a recession-like slowdown in manufacturing,” said Hicks, director of Ball State’s Center for Business and Economic Research (CBER). “However, this jobs report makes clear that jobs are still plentiful and tight labor market nationally continue to sustain modest wage growth.

“The declining share of the US economy involved in manufacturing, combined with geographic concentration of factory jobs gives us continued hope that the tariff-driven slowdown won’t cause a nationwide recession,” he said. “Of course, that still indicates a tough year for much of he [sic] Midwest as manufacturing continues to contract.”

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