The U.S. composite PMI index in May slowed to 53.8 from 56 in April, a four-month low; the manufacturing PMI fell to 57.5 from 59.2; as the slowdown in economic growth raised questions about the health of the U.S. economy, the standard The S&P 500 extended losses.
U.S. economic activity continued to cool in the second quarter, hurt by soaring price pressures, weaker demand and worsening supplier delivery times. According to S&P Globaldata, which aggregates manufacturing and services production data5The initial value of the monthly composite purchasing managers’ index has changed from the previous month’s56.0down to53.8, the lowest level since the beginning of the year.At the beginning of this year, whenOmicronmutated strains brought the recovery to an abrupt halt.For general interpretation, the data are higher than50is a sign of expansion, while the data is below50means shrinking.
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Examining these results in more detail, the service sectorPMIFrom4monthly55.6down to53.5disappointingly, the market is expecting a more moderate pullback to55.2. While demand conditions remain strong due to the easing of coronavirus restrictions, growth in industries in which most Americans work continues to slow amid concerns about rising interest rates and consumers’ less willingness to spend as real incomes fall. Despite the deceleration, optimism among service-sector companies is rising, as labor and supply shortages are expected to ease, while a contraction in customer demand will prove temporary.
other aspects,5monthly manufacturingPMIFrom59.2down to57.5, in line with general expectations. Despite concerns about the economic slowdown, the pace of economic growth remained solid as production and new orders rose sharply, as well as an accelerating employment turnaround.Overall, accounting forGDPabout12%of the goods-producing sector maintained steady expansion, but confidence fell amid sharply rising cost burdens7month low.
In summary,5moonPMIData shows U.S. economic activity is losing strength, but annualizedGDPStill showing growth of about2%, suggesting the U.S. economy isn’t about to fall off a cliff, as many Wall Street analysts had predicted. Healthy output growth, solid jobs data and continued cost pressures on U.S. businesses suggest the Fed will have to continue unwinding its easing policy in the coming months to achieve its mandate.This can be a problem for risky assets, especially ifGDPSlow down too fast.
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PMIAfter the report was released, S&P500Indices immediately extended their intraday losses, falling more than2%.Although the sharp sell-off andSnapThe weakness in the tech sector triggered by the poor outlook is related, but the rapid slowdown in economic growth is also responsible for the negative risk sentiment in the market.
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Standard & Poor’s500index5minute chart
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