Latest news with #LuciaMutikani
Yahoo
24-07-2025
- Business
- Yahoo
US business activity rises; tariffs fuel inflation concerns
By Lucia Mutikani WASHINGTON (Reuters) -U.S. business activity picked up in July, but companies asked higher prices for goods and services, supporting economists' views that inflation will accelerate in the second half of the year mainly because of tariffs on imports. Despite the increase in activity this month, the survey from S&P Global on Thursday also showed sentiment among businesses remained downbeat, which it said "primarily reflected broad-based concerns over tariffs and cuts to state funding following recent federal government policy changes." Consumer prices increased by the most in five months in June, with solid rises in the costs of tariff-exposed goods like household furnishings and supplies, appliances, sporting goods and toys, signaling that President Donald Trump's broad import duties were starting to have an impact on inflation. S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 54.6 this month, the highest level since December, from 52.9 in June. A reading above 50 indicates expansion in the private sector. The improvement came from the services sector, where the flash PMI surged to 55.2 from 52.9 in June. Economists polled by Reuters had forecast the services PMI inching up to 53.0. The survey's flash manufacturing PMI dropped to 49.5, the first contraction since December, from 52.9 in June. Manufacturing received a bump from front-loading of activity ahead of tariffs as well as from the protectionist nature of the duties. But S&P Global noted that "any protectionist benefits of import tariffs were often outweighed by concerns over higher prices and rising costs." Economists polled had forecast the manufacturing PMI easing to 52.7. HIGHER PRICES The survey's measure of prices paid by businesses for inputs edged up to 61.9 from 61.2 in June. The price gauge for services inputs jumped to 61.4 from 59.7 in June. While the pace of price rises for manufacturing inputs slowed, nearly two-thirds of manufacturers in the survey reporting higher costs attributed those to tariffs. The survey's measure of prices charged by businesses for goods and services ticked up to 58.6 from 58.1 in June. The prices charged gauge for services increased to 58.2 from 57.2 in June. About 40% of service providers reporting higher selling prices explicitly mentioned tariffs, while just under half of their counterparts in manufacturing blamed the import duties. The increase in business activity and elevated price gauges at face value argue against the Federal Reserve resuming interest rate cuts this month. Trump is demanding the U.S. central bank reduce borrowing costs, citing among others the struggling housing market. The Fed is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, when it meets later this month. "The rise in selling prices for goods and services in July, which was one of the largest seen over the past three years, suggests that consumer price inflation will rise further above the Fed's 2% target in the coming months as these price hikes feed through to households," said Chris Williamson, chief business economist at S&P Global Market Intelligence. The survey also suggested the labor market remained stable early in the third quarter, though factories shed jobs. New orders received by businesses increased this month, though both goods and services exports declined. The weakness is likely because of trade tensions and the Trump administration's immigration crackdown. Data and anecdotal evidence have shown fewer tourists visiting this year.
Zawya
17-07-2025
- Business
- Zawya
US retail sales beat expectations in June
U.S. retail sales rebounded more than expected in June, but some of the increase likely reflected higher prices for some goods exposed to tariffs. Retail sales increased 0.6% last month after an unrevised 0.9% drop in May, the Commerce Department's Census Bureau said on Thursday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, edging up 0.1%. Part of the rise in retail sales last month could be due to tariff-driven price increases rather than volumes. Inflation data this week showed solid increases in June in the prices of tariff-sensitive goods like household furnishings and supplies, appliances, sporting goods and toys. Retail sales excluding automobiles, gasoline, building materials and food services increased 0.5% last month after a downwardly revised 0.2% in May. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4% in May. "All told, the household sector still appears to be holding up, but a moderation in consumer spending appears under way," said Sam Bullard, a senior economist at Wells Fargo. (Reporting by Lucia Mutikani, Editing by Nick Zieminski)
Yahoo
01-07-2025
- Business
- Yahoo
US manufacturing mired in weakness as tariffs bite
By Lucia Mutikani WASHINGTON (Reuters) -U.S. manufacturing remained sluggish in June, with new orders subdued and prices paid for inputs creeping higher, suggesting that the Trump administration's tariffs on imported goods continued to hamper businesses' ability to plan ahead. The Institute for Supply Management (ISM) said on Tuesday that its manufacturing PMI nudged up to 49.0 last month from a six-month low of 48.5 in May. It was the fourth straight month that the PMI was below the 50 mark, which indicates contraction in the sector that accounts for 10.2% of the economy. Economists polled by Reuters had forecast the PMI little changed at 48.8. The survey joined weak data on the housing market, consumer spending and swelling unemployment rolls that have suggested the economy's underlying momentum slowed further in the second quarter even as gross domestic product probably rebounded as the drag from a record trade deficit faded due to falling imports. A measure of domestic demand grew at its slowest pace in more than two years in the January-March quarter. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the economic data. The PMI last month was likely lifted by longer delivery times, which under normal circumstances would be related to strong demand. The extensive tariffs have caused bottlenecks in the supply chain, resulting in factories waiting longer for raw material deliveries. The ISM survey's supplier deliveries index slipped to 54.2 from 56.1 in May, though it was still high with a reading above 50 indicating slower deliveries. The ISM has reported "ongoing delays in clearing goods through ports of entry." The situation, however, appears to have improved slightly, with the survey's imports measure rising to a still-subdued 47.4 after slumping to 39.9 in May. Manufacturing is heavily reliant on imported raw materials. Though production at factories picked up last month, it was probably the result of manufacturers working through backlog orders. The ISM survey's forward-looking new orders sub-index dropped to 46.4 from 47.6 in May. This measure has now contracted for five consecutive months. Its gauge of prices paid by factories for inputs ticked up to 69.7 from 69.4 in the prior month. With manufacturers facing weak demand and higher prices for inputs, employment declined further last month. The survey's measure of manufacturing employment fell to 45.0 from 46.8 in May. The ISM has noted an "acceleration of headcount reductions due to uncertain near- to mid-term demand." (Reporting By Lucia Mutikani; Editing by Chizu Nomiyama) Sign in to access your portfolio
Yahoo
01-07-2025
- Business
- Yahoo
US manufacturing mired in weakness as tariffs bite
By Lucia Mutikani WASHINGTON (Reuters) -U.S. manufacturing remained sluggish in June, with new orders subdued and prices paid for inputs creeping higher, suggesting that the Trump administration's tariffs on imported goods continued to hamper businesses' ability to plan ahead. The Institute for Supply Management (ISM) said on Tuesday that its manufacturing PMI nudged up to 49.0 last month from a six-month low of 48.5 in May. It was the fourth straight month that the PMI was below the 50 mark, which indicates contraction in the sector that accounts for 10.2% of the economy. Economists polled by Reuters had forecast the PMI little changed at 48.8. The survey joined weak data on the housing market, consumer spending and swelling unemployment rolls that have suggested the economy's underlying momentum slowed further in the second quarter even as gross domestic product probably rebounded as the drag from a record trade deficit faded due to falling imports. A measure of domestic demand grew at its slowest pace in more than two years in the January-March quarter. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the economic data. The PMI last month was likely lifted by longer delivery times, which under normal circumstances would be related to strong demand. The extensive tariffs have caused bottlenecks in the supply chain, resulting in factories waiting longer for raw material deliveries. The ISM survey's supplier deliveries index slipped to 54.2 from 56.1 in May, though it was still high with a reading above 50 indicating slower deliveries. The ISM has reported "ongoing delays in clearing goods through ports of entry." The situation, however, appears to have improved slightly, with the survey's imports measure rising to a still-subdued 47.4 after slumping to 39.9 in May. Manufacturing is heavily reliant on imported raw materials. Though production at factories picked up last month, it was probably the result of manufacturers working through backlog orders. The ISM survey's forward-looking new orders sub-index dropped to 46.4 from 47.6 in May. This measure has now contracted for five consecutive months. Its gauge of prices paid by factories for inputs ticked up to 69.7 from 69.4 in the prior month. With manufacturers facing weak demand and higher prices for inputs, employment declined further last month. The survey's measure of manufacturing employment fell to 45.0 from 46.8 in May. The ISM has noted an "acceleration of headcount reductions due to uncertain near- to mid-term demand." (Reporting By Lucia Mutikani; Editing by Chizu Nomiyama) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-06-2025
- Business
- Yahoo
US business activity moderates; price pressures building up
By Lucia Mutikani WASHINGTON (Reuters) -U.S. business activity slowed marginally in June, though prices increased further amid President Donald Trump's aggressive tariffs on imported goods, suggesting that an acceleration in inflation was likely in the second half of the year. The survey from S&P Global on Monday showed measures of prices paid by factories for inputs and charged for finished products jumped to levels last seen in 2022. Nearly two-thirds of manufacturers reporting higher input costs attributed these to tariffs while just over half of respondents linked increased selling prices to tariffs, S&P Global said. That supports economists' expectations that inflation would surge from June following mostly benign consumer and producer price readings in recent months. Economists have argued that inflation has been slow to respond to Trump's sweeping import duties because businesses were still selling stock accumulated before the tariffs came into effect. S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, slipped to 52.8 this month from 53.0 in May. A reading above 50 indicates expansion in the private sector. The survey's flash manufacturing PMI was unchanged at 52.0. Economists polled by Reuters had forecast the manufacturing PMI easing to 51.0. Its flash services PMI dipped to 53.1 from 53.7 in May. Economists had forecast the services PMI falling to 53.0. The survey was conducted in the June 12-20 period, before the U.S. joined in the conflict between Israel and Iran. "The June flash PMI data indicated that the U.S. economy continued to grow at the end of the second quarter, but that the outlook remains uncertain while inflationary pressures have risen sharply in the past two months," said Chris Williamson, chief business economist at S&P Global Market Intelligence. So-called hard data on retail sales, housing and the labor market have painted a picture of an economy that was softening because of the uncertainty caused by the constantly shifting tariffs policy. The escalation in tensions in the Middle East added another layer of uncertainty. INFLATION POISED TO ACCELERATE The S&P Global survey's measure of new orders received by businesses declined to 52.3 from 53.0 in May. A measure of prices paid by businesses for inputs fell to 61.6 from 63.2 last month. But manufacturers faced higher input costs, with this price gauge jumping to 70.0 this month. That was the highest reading since July 2022 and followed 64.6 in May. Prices paid for inputs by services businesses remained elevated, with tariffs, higher financing, wage and fuel costs cited. The pace of increase, however, slowed amid competition. The survey's measure of prices charged by businesses for goods and services remained at lofty levels as manufacturers passed on the increased costs from tariffs to consumers. The prices charged gauge for manufacturers shot up to 64.5, the highest since July 2022, from 59.7 in May. Rising oil prices because of the strife in the Middle East are seen contributing to higher inflation. The Federal Reserve last week kept the U.S. central bank's benchmark overnight interest rate in the 4.25%-4.50% range, where it had been since December. Fed Chair Jerome Powell told reporters he expected "meaningful" inflation ahead. "The data therefore corroborate speculation that the Fed will remain on hold for some time to both gauge the economy's resilience and how long this current bout of inflation lasts for," Williamson said. Employment picked up this month, mostly driven by manufacturing, where some factories are experiencing order backlogs. S&P Global noted a slight rise in optimism among manufacturers "in part reflecting hopes of greater benefits from trade protectionism." It, however, added that "companies generally remained less upbeat than prior to the inauguration of President Trump." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
