Manufacturing recovery on the horizon as global factory production dips but supply chains improve

JPMorgan's economic team predicts a recovery in the manufacturing sector after a period of stagnation in the first half of the year. They note that while global manufacturing stalled, non-manufacturing components rose, allowing the global economy to grow above trend. Labor income is rising, finished goods inflation is falling, and business capital spending is expanding. Additionally, inventories are shifting from a drag to a lift, and supply-chain bottlenecks are easing. The team believes these factors, along with the potential end of the tech spending decline and the pickup in global motor vehicle production, will contribute to a jump in factory output in the coming months.