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US manufacturing PMI hits 4yr high
United States manufacturing activity climbed to its highest level in more than four years in July, supported by strong order growth and a rebound in factory employment, although the conflict in the Middle East continued to pressure supply chains and keep input costs elevated. The Institute for Supply Management (ISM) manufacturing survey showed responses remained largely negative, with the U.S.-Iran war dominating comments from businesses. Price volatility was also a major concern, with some economists expecting the Federal Reserve could raise interest rates as soon as next month. The ISM said its manufacturing PMI rose to 55.6 in July, the highest reading since May 2022, from 53.3 in June. Markets had expected the index to increase to 54.0. Economists welcomed the improvement in activity, particularly the return to manufacturing employment growth for the first time in 33 months. Manufacturing, which represents around 9.4% of the economy, has been supported by businesses bringing forward orders to avoid higher prices and shortages linked to the conflict. An artificial intelligence buildout has also supported activity in the technology sector, helping offset the impact of import tariffs on manufacturing. Wit
Reports
US GDP slows; imports mask domestic demand
United States economic growth slowed in the second quarter as a surge in imports widened the trade deficit, although strong consumer spending and business investment in artificial intelligence infrastructure highlighted the resilience of domestic demand. Data released by the Commerce Department on Thursday showed the moderation in gross domestic product (GDP) also reflected ongoing inventory drawdowns to meet strong consumer demand, as well as reduced spending linked to the Strategic Petroleum Reserve, which weighed on federal government expenditure. The figures suggest the economy absorbed the initial oil price shock caused by the Middle East conflict, though renewed hostilities between the United States and Iran continue to pose risks to growth in the second half of the year. Economists cautioned that consumer spending could come under pressure after the boost from President Donald Trump's "One Big Beautiful Bill" tax refunds faded. With average petrol prices climbing back above US$4 a gallon, households are also facing rising cost pressures. Income growth has moderated alongside a stable labour market, while the household savings rate fell to a four-year low of 2.7% in June, leaving consumers with less financial
Reports
US consumer confidence weakens in July
United States consumer confidence unexpectedly weakened in July as Americans grew more cautious about the economy, with perceptions of the labour market remaining subdued despite easing concerns over energy prices and geopolitics. The Conference Board's Consumer Confidence Index fell to 90.8 in July from an upwardly revised 92.2 in June. Economists had expected the index to edge higher to 92.3, following the previously reported June reading of 91.2. The weaker-than-expected result suggests households remain cautious about the economic outlook, with employment concerns continuing to weigh on sentiment. "Consumers’ write-in responses on factors affecting the economy continued to be mostly pessimistic in July," said Dana M. Peterson, Chief Economist at The Conference Board. “References to prices and oil and gas eased in frequency but remain elevated. Comments about food and grocery prices increased. "Mentions of war, geopolitics, and conflict eased during the sample period. However, as the fighting has reaccelerated quite recently there could be an increase in these mentions in the revised data for July. "Notably, references to jobs and unemployment picked up slightly.”
Reports
US consumer sentiment rises as housing slows
United States consumer sentiment climbed to a five-month high in July, though the improvement may prove short-lived as renewed conflict in the Middle East pushes fuel prices higher and threatens to weigh on household confidence. The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index rose to 54.4 in July, the highest reading since February, from a final reading of 49.5 in June. Markets had expected the index to increase to 51.0. The survey was conducted between 23 June and 13 July, with more than 70% of responses collected before the collapse of the U.S.-Iran ceasefire last week, which sent oil prices to a one-month high and lifted petrol prices. "This month's rise in sentiment was pervasive across the population, seen across groups by age, income, wealth, and political party," said Joanne Hsu, the director of the Surveys of Consumers. "However, with prices remaining frustratingly high, consumers are hardly ebullient about the economy; sentiment is down 12% from a year ago. Thus, sentiment’s upward momentum may prove difficult to sustain if recent declines in gas prices continue to reverse course." Consumers' one-year inflation expectations eased to 4.2% in July from 4.6% in June, whil
Reports
US retail sales rise; consumer spending holds
United States retail sales rose modestly in June as lower petrol prices weighed on service station receipts, but stronger vehicle purchases and robust online shopping signalled resilient consumer demand and prompted economists to lift second-quarter economic growth forecasts. Retail sales increased 0.2% in June, matching market expectations, after an upwardly revised 1.0% gain in May, according to the Commerce Department's Census Bureau. It marked the smallest monthly increase in five months, with the data reflecting spending on goods and not adjusted for inflation. Compared with a year earlier, retail sales climbed 6.7%, despite households continuing to grapple with higher prices stemming from import tariffs and, more recently, renewed conflict in the Middle East. Consumer spending has remained supported by higher-income households benefiting from rising equity markets, while generous tax refunds, healthy savings and bargain hunting have also helped sustain demand. A resilient labour market, characterised by steady wage growth amid limited hiring and layoffs, has further underpinned spending. Separate data from the Labor Department showed initial jobless claims fell by 8,000 to a seasonally adjusted 208,000 in t

Reports
US services growth eases in June as hiring rebounds
United States services sector activity slowed modestly in June as a surge in business orders linked to the Middle East conflict faded, though employment returned to growth after three consecutive months of contraction, signalling continued resilience in the labour market. The Institute for Supply Management (ISM) said on Monday its Services Purchasing Managers' Index (PMI) edged down to 54.0 in June from 54.5 in May. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity. One of the report's strongest developments was the Employment Index, which expanded for the first time in four months. Some survey respondents attributed stronger hiring to increased tourism associated with international soccer events, boosting demand for air travel, accommodation and hospitality. The fastest-growing services industry in June was Arts, Entertainment & Recreation (AE&R). Since the impact of big events is limited because such industries as AE&R, Accommodation & Food Services and Transportation & Warehousing are small segments of sector gross domestic product (GDP), the World Cup “was not a driver, but it was certainly welcome”, Steve Miller, CPSM, CSCP, Chair o
Reports
US consumer sentiment edges higher in June
United States consumer sentiment improved modestly in June as easing tensions between the United States and Iran and lower fuel prices helped lift confidence, although households continued to cite the high cost of living as their biggest financial concern. The latest University of Michigan Surveys of Consumers showed the Consumer Sentiment Index rose to a final reading of 49.5 in June, up from 44.8 in May and slightly above the preliminary reading of 48.9 released earlier in the month. The result marked the first improvement after sentiment declined following the outbreak of conflict involving the United States, Israel and Iran in February. However, the reading fell just short of market expectations for a final figure of 50.0. The improvement was broad-based, with gains recorded across income groups, wealth levels and political affiliations. "The cost of living remains at the forefront of consumers' minds," said Joanne Hsu, the director of the Surveys of Consumers. "For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances." Hsu noted that the strong performance of equity markets has benefited household finances, although the gains have be
Reports
US core inflation climbs in May; GDP revised higher
The Federal Reserve's preferred inflation measure accelerated to its highest annual rate since 2023 in May, while the United States economy expanded much faster than previously estimated during the first quarter, reinforcing expectations that interest rates will remain elevated for an extended period. Data released by the Commerce Department's Bureau of Economic Analysis on Thursday showed the core personal consumption expenditures (PCE) price index, which excludes food and energy, increased 0.3% in May, lifting the annual inflation rate to 3.4%. The annual reading marked the highest level since October 2023. The headline PCE index rose 0.4% during the month, taking annual inflation to 4.1%, the strongest reading since April 2023. The annual figure was in line with market expectations, while the monthly increase was 0.1 percentage point below forecasts.Credit: U.S. Bureau of Economic AnalysisAlthough Federal Reserve policymakers monitor both headline and core inflation, they place greater emphasis on the core measure as an indicator of underlying price pressures. This year's inflation acceleration has been driven largely by higher energy prices linked to the Iran conflict, with those cost increases increasingly filteri
Reports
US retail sales rise 0.9% in May despite war shock
United States retail sales rose more than expected in May amid continued resilience in the American economy, even as households faced higher fuel prices and persistent inflationary pressures linked to the ongoing conflict involving Iran. The Commerce Department reported that retail sales increased 0.9% in May, following a downwardly revised 0.4% gain in April. Markets had expected a more modest 0.5% rise. Sales advanced 6.9% compared with a year earlier, marking a fourth consecutive month of gains and adding to recent evidence of solid job growth and sustained household spending. The data comes as the Federal Reserve maintained interest rates in the 3.50% to 3.75% range at its latest meeting, while signalling that borrowing costs may need to rise further to contain inflation pressures linked to higher energy prices and geopolitical instability. The central bank described economic activity as “expanding at a solid pace despite elevated uncertainty” stemming from the Middle East conflict. Motor vehicle purchases helped drive the gains, while gasoline prices also played a significant role in lifting nominal spending. Service station receipts rose 3.4% in May, contributing to the overall increase in retail activit