Services Sector Declines for First Time in 15 Months

Activity in the services sec💫tor stepped back in April, showing the first declines in𝓀 service-based business since 2022 as higher prices and interest rates weighed on firms.

The Purchasing Managers Index (PMI) survey of service businesses by the 澳洲幸运5开奖号码历史查询:Institute of Supply Man❀agement (ISM) came in at 49.4% in April, two percentage points 澳洲幸运5开奖号码历史查询:lower than last month and short of the 52.0% figure that economists expected to see. It’s the first time the survey hasn’t registered 50% or higher s𒁏ince December🅺 2022.

“The decline in the composite index in April is a result of lower business activity, slower new order✤s growth, faster supplier deliveries, and the continued contraction in employment,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.

Prices surged in the ISM survey, moving up to 59.2%, up nearly six percentage points, while the S&P Global survey showed input cost✃s rose at a pace faster than the pre-pandemic average.

“Sticky inflation🌞, higher subsequent interest rates, and geop꧃olitical tensions are weighing on survey panelists, with increased business uncertainty leading to more negative responses,” wrote Matthew Martin, U.S. economist at Oxford Economics.

However, Martin wrote he believed these risks would subside, putting the Federal Reserve in a position to begin cutting interest rates at its September m�♔�eeting. 

Combined with slower jobs growth reported in April, BMO Senior Economist Sal Guatieri wrote that services sector data gave investors more confidence that a rate cut could come, though 澳洲幸运5开奖号码历史查询:inflation still proved to be a problem.

“The combined Fed-friendly jobs report and downshift in services activity puts a fall rate cut back on the table, though it will still come down to some much friendlier inflation reports...and thos𝄹e could prove a little stickier than the 🍸slowdown in growth,” he wrote.

-Terry Lane

Federal Reserve's Goolsbee Wants More Data After ‘Solid’ Jobs Report

In an interview on Bloomberg Television, Chic♛ago Federal Reserve Bank President Austan Goolsbee wouldn’t cꦏ👍ommit to cutting or raising rates, saying he wanted to continue to monitor data as it comes in. 

Goolsbee said today’s report on jobs was “solid” and showed the economy didn’t look to be “overheating.” The 175,000 job additions would be good news in the pre-pandemic “normal times,” he said.

“When the business cycle turns the wrong way, it's not subtle. The unemployment rate goes up quite significantly, you see credit delinquencies deteriorate,” Goolsbee said. “You haven’t really seen that.”

-Terry Lane

Federal Reserve's Bowman Remains Ready for Rate Hikes

After Federal Reserve Chair Jerome Powell 澳洲幸运5开奖号码历史查询:shrugged off the idea that the central bank would need to raise rates again to battle 澳洲幸运5开奖号码历史查询:inflation, Fed Governor Michelle Bowman today indicated she remained ready to hike rates if prices continue to move higher.

“While the current stance of monetary policy appears to be at a restrictive level, I remain wil🐲ling to raise the federal funds rate at a future meeting should the incoming data indicate that progress 💫on inflation has stalled or reversed,” she told the Massachusetts Bankers Association today. 

This echoes similar comments 澳洲幸运5开奖号码历史查询:she made in April.

Inflation has begun to 澳洲幸运5开奖号码历史查询:creep back up in 2024 and the Federal Reserve has held interest rไates at 23-year 🎶highs to keep a lid on price hikes. 

In her comments, Bowman identified several risks she was monitoring that made her generally uncertain about the economy's direction, including strong consumer demand, continued wage growth and 澳洲幸运5开奖号码历史查询:geopolitical developments that 澳洲幸运5开奖号码历史查询:could affect supply chains. 

“The loosening in financial conditions since late last year and add🎉itional fiscal stimulus could add momentum𒅌 to demand, stalling any further progress or even causing inflation to reaccelerate,” she said. 

-Terry Lane

Far Fewer Jobs Were Added Than Expected in April

U.S. employers added fewer jo💜bs than expected in April, breaking a three-month-long streak of hotter-than-expected jobs data. 

Employers added 175,000 jobs in April, a slowdown from the upwardly revised 315,000 jobs created in March, the Bureau of Labor Statistics said Friday. That was well below the forecast for 240,000, ​​according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

It was the 澳洲幸运5开奖号码历史查询:first time in four months the job data undershot expectations. The unemployment ra꧙te edged up to 3.9%, higher than the median forecast for it to stay at 3.8%, but staying close to historic lows.

While the number of jobs added wasn’t especially bad by historic standards—the average in the three years before the pandemic was 澳洲幸运5开奖号码历史查询:177,000 jobs a month—it added to gathering signs of weakness, such as a 澳洲幸运5开奖号码历史查询:reduction in job openings over recent months as the Federal Reserve’s campaign of interest 澳洲幸运5开奖号码历史查询:rate hikes, intended to combat in🎐flation, drags on the economy.