U.S. business activity cooled to a four-month low in April due to weak demand, and inflation slowed slightly despite a sharp rise in input prices, which may suggest that U.S. inflation may slow down next.
The preliminary value of the S&P Global Manufacturing PMI in the United States in April fell below the boom-bust line, recording 49.9, a four-month low; the preliminary value of the S&P Global Services PMI in the United States in April was 50.9, a five-month low; the preliminary value of the S&P Global Composite PMI in the United States in April was 50.9, a four-month low.
After the data was released, gold briefly returned above the $2,330 mark, but soon fell back again; the U.S. dollar index fell 40 points in the short term and fell below the 106 mark.
Chris Williamson, chief business economist at S&P Global, said the U.S. economy lost momentum at the beginning of the second quarter, with the initial PMI for April showing that respondents' business activity grew below trend. With new business inflows falling for the first time in six months in April and corporate expectations for future output falling to a five-month low, the pace of growth is likely to slow further in the coming months.
More challenging business conditions have prompted companies to slash jobs at a pace not seen since the global financial crisis, excluding the early months of the pandemic lockdown. Deteriorating demand and a cooling labor market have led to lower price pressures, as the rate of growth of sales prices of both goods and services slowed in April, a welcome slowdown.
The decline in the employment index indicates that companies believe that current production capacity is sufficient to meet demand. The order backlog remained in the contraction range that month.
New business at service providers shrank for the first time since October, with some companies saying rising borrowing costs and high prices were limiting demand.
Although the Federal Reserve has raised interest rates by 525 basis points since March 2022 to curb inflation, the U.S. economy has continued to outperform its peers around the world, and a series of stronger-than-expected inflation and employment data may indicate that efforts to reduce inflation to the Fed's 2% target have stalled or even reversed.
The Fed will hold a rate meeting next week and is expected to keep the current policy rate of 5.25%-5.50% unchanged. Last week, several Fed officials stopped signaling at least one rate cut this year and said that recent data meant that monetary policy needed to remain tight for longer.
Article forwarded from: Jinshi Data