Today economic data shows mixed trends

US private sector growth accelerates

The S&P Global US Composite PMI increased to 54.6 in June, its highest level since April 2022, from 54.5 in May, preliminary data showed on Friday. The service sector exhibited the most significant improvement, while manufacturing output slowed. Additionally, inflationary pressures moderated across both sectors.

Eurozone Private Sector Growth Slows Sharply

The HCOB Eurozone Composite PMI fell to 50.8 in June from 52.2 in May, well below forecasts of 52.5, preliminary estimates showed. The reading pointed to a fourth straight month of rising private sector activity, but a slower one. Manufacturing production decreased at a faster pace while growth int the service sector softened.

Japan Inflation Rate Rises to 3-Month Peak

The annual inflation rate in Japan accelerated to 2.8% in May 2024 from 2.5% in April, pointing to the highest reading since February.

BoJ Governor Kazuo Ueda has repeatedly suggested that a July rate hike is a possibility. However, today’s report indicates that the inflation uptick is mainly due to cost-push factors, such as higher electricity prices, rather than increased demand. This might not provide a strong enough basis yet for BoJ to proceed with a rate hike at this time.

UK Retail Sales Surprisingly Strong

Retail sales in the UK soared 2.9% month-over-month in May 2024, recovering from an upwardly revised 1.8% decline in April and much higher than forecasts of a 1.5% gain. Year-on-year, retail sales went up 1.3%. More broadly, sales rose by 1% in the three months to May 2024 when compared with the previous three months. However, they fell by 0.2% when compared with the three months to May 2023.