The US economy may be heading towards a recession, according to recent analyses. Semiconductor supply chains have reported delays and slowdowns in production ramp-ups, indicating that suppliers need to remain vigilant of any economic changes.
Taiwan's manufacturing Purchasing Managers' Index (PMI) for August, as reported by the Chung-Hua Institution for Economic Research (CIER), has shown the slowest growth since February 2024. This slowdown is primarily attributed to factors including the US economic deceleration, interest rate cuts, and the upcoming US presidential election.
Recent analyses reveal that unemployment rates in 28 out of 50 US states have surpassed their 2019 averages. The Sahm Rule, a precise recession indicator for the US economy since 1960, states that the start of a recession is signaled when the 3-month average unemployment rate rises by 0.5 percentage points (pp) from its lowest level in the preceding 12 months. A value between 0.3pp and 0.8pp suggests the possible onset of a recession, while a value over 0.8pp confirms one. The current value stands at 0.5pp, indicating a potential recession risk.
US retail sales in August totaled approximately US$710.8 billion, suggesting restrained consumer spending. While e-commerce experienced a 1.4% growth, other categories including electronics, home appliances, automotive, food, and household items all declined.
The decline in US consumer markets is closely tied to interest rates. High borrowing costs suppress capital expenditures and limit consumer demand. On September 18, the Federal Open Market Committee (FOMC) lowered rates by 0.5pp. The benchmark interest rate is expected to be further reduced by another 0.5pp from 4.25% to 4.5%. These measures aim to contain inflation while maintaining stable economic growth.
Taiwan's front-end semiconductor processes and AI server supply chains have shown robust performance, indicating that these sectors have yet to experience significant pressure from the United States' high interest rates. Taiwan's export orders for January to August 2024 have grown by 3.5%, with categories including servers, mobile phones, and notebooks contributing to this increase.
