US August services sector index tops expectations, calming recession fears. An index that measures activity in the US service sector grew at a quicker rate than expected in August, according to a report published on Wednesday by the Institute for Supply Management. The US ISM Services purchasing managers’ index, or PMI, rose from 52.7 in July to 54.5 in August exceeding expectations of 52.6. Looking at some subsectors, business activity/production inched up from 57.1 to 57.3. On the other hand, new orders soared from 55.0 to 57.5 while employment leapt to 54.7 from 50.7. Prices also rose from 56.7 to 58.9. Policymakers at the Federal Reserve, the US central bank, consider the services sector as crucial to bringing inflation down to their two percent target and Wednesday's ISM report does not show that any economic slowdown is underway.
Eurozone retail sales dip in July on fears of slowing economy. Retail sales in the eurozone dipped in July, adding to signs of weak confidence in the currency bloc amid rising consumer prices and an environment of rising interest rates. Compared to July of last year, retail sales volume fell by one percent in the eurozone and by 1.2 percent in the European Union, according to Europe’s official statistics office Eurostat. Data showed that the volume of retail trade was down by 3.4 percent for automotive fuels, and 2.2 percent for food, drinks and tobacco in the eurozone over the same period. At the same time, retail sales volume was up by 1.1 percent for non-food products. Consumption in the region has been slow as real incomes fall and households are allocating a larger proportion of their incomes on expensive energy and on credit and mortgage repayments, leaving a smaller budget for the purchase of other goods. Because of higher interest rates and as a precaution in view of the expected economic slowdown and potentially higher unemployment, households have also increased their savings.
German industrial output decline adds to recession concerns. Industrial output in Germany fell again in July, as Europe’s powerhouse enters the third quarter on the wrong foot. Industrial Production in Europe’s largest economy decreased by 0.80 percent in July compared with the previous month, worse than economists’ predictions for a fall of 0.5 percent and following a downwardly revised 1.4 percent dip in June. Industrial production contacted by 2.1 percent on an annual basis, after declining by 1.5 percent in the previous month. Germany's key industrial sector has been going through turbulent times in recent months, as inflation and high energy prices alongside a weakening Chinese economy take their toll on Europe’s industrial giant.
India’s services PMI falls in August, overall conditions remain robust. India's service sector activity continued to expand at a brisk pace in August amid a record-breaking increase in new export business, according to survey results by S&P Global published on Tuesday. The survey however shows the services PMI losing some steam as it fell to 60.1 from 62.3 in July. But overall conditions remained strong despite elevated inflationary pressures. The reading is well above the 50 level that demarcates expansion from contraction in the sector. The data showed that exports were at a record high on strong foreign demand, with overall conditions remaining robust despite elevated inflationary pressures.
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