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Yahoo
23-04-2025
- Business
- Yahoo
US economic output hits 16-month low in April, expectations crater
US economic activity continued to sink this month amid uncertainty around tariff policy. New data from S&P Global out Wednesday showed its flash composite PMI output index, which captures activity in the services and manufacturing sectors, fell to 51.2 in April, hitting its lowest level in 16 months. Manufacturing activity rose to 50.7, up from 50.2 in March, while services activity fell to 51.4 from 54.4. Readings above 50 indicate an expansion in activity in the sector; readings below 50 indicate contraction. Sentiment about the year ahead fell sharply, reaching the lowest level since July 2022 and the second-lowest since September 2020. Meanwhile, prices charged for goods and services "rose at the sharpest rate for just over a year," S&P Global said in a release. Manufactured goods saw an "especially steep increase," associated with higher tariffs. Read more: What Trump's tariffs mean for the economy and your wallet "The early flash PMI data for April point to a marked slowing of business activity growth at the start of the second quarter, accompanied by a slump in optimism about the outlook," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "At the same time, price pressures intensified, creating a headache for a central bank which is coming under increasing pressure to shore up a weakening economy just as inflation looks set to rise." Williamson added that confidence about business conditions in the year ahead has deteriorated, "largely thanks to growing concerns about the impact of recent government policy announcements." Wednesday's data is the latest in a string of weak surveys on activity in the manufacturing and services sectors. On Tuesday, the Richmond Federal Reserve's survey of manufacturing activity revealed the composite manufacturing index fell to -13 in April, down from -4. Meanwhile, new orders in the month fell to a reading of -15, well below the -4 seen in March. Also out Tuesday, the Philadelphia Federal Reserve's nonmanufacturing business outlook survey tumbled to a reading of -42.7, its lowest reading since May 2020. That data followed the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey last week, which showed general activity in the sector dropped to an index reading of -26 in April, its lowest reading since April 2023 and well below the 12.5 reading the month prior. April's sharp move lower marked the fourth-largest monthly decline in history, only trailing the drop-offs in 2020 and 2008. The growing concern among economists and the Federal Reserve is that the recent rush of weak survey data could eventually lead to a decline in economic growth data. An April 7 report from the St. Louis Federal Reserve highlighted that the recent spike in economic policy uncertainty "could lead to recession conditions." "Businesses and households are saying in surveys that they are experiencing incredibly high uncertainty," Powell said this week, referencing the St. Louis Fed's work. "There's a lot of research, some of it from the Fed, showing that that does lead to businesses and households stepping back from decisions." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Yahoo
23-04-2025
- Business
- Yahoo
US economic output hits 16-month low in April, expectations crater
US economic activity continued to sink this month amid uncertainty around tariff policy. New data from S&P Global out Wednesday showed its flash composite PMI output index, which captures activity in the services and manufacturing sectors, fell to 51.2 in April, hitting its lowest level in 16 months. Manufacturing activity rose to 50.7, up from 50.2 in March, while services activity fell to 51.4 from 54.4. Readings above 50 indicate an expansion in activity in the sector; readings below 50 indicate contraction. Sentiment about the year ahead fell sharply, reaching the lowest level since July 2022 and the second-lowest since September 2020. Meanwhile, prices charged for goods and services "rose at the sharpest rate for just over a year," S&P Global said in a release. Manufactured goods saw an "especially steep increase," associated with higher tariffs. Read more: What Trump's tariffs mean for the economy and your wallet "The early flash PMI data for April point to a marked slowing of business activity growth at the start of the second quarter, accompanied by a slump in optimism about the outlook," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "At the same time, price pressures intensified, creating a headache for a central bank which is coming under increasing pressure to shore up a weakening economy just as inflation looks set to rise." Williamson added that confidence about business conditions in the year ahead has deteriorated, "largely thanks to growing concerns about the impact of recent government policy announcements." Wednesday's data is the latest in a string of weak surveys on activity in the manufacturing and services sectors. On Tuesday, the Richmond Federal Reserve's survey of manufacturing activity revealed the composite manufacturing index fell to -13 in April, down from -4. Meanwhile, new orders in the month fell to a reading of -15, well below the -4 seen in March. Also out Tuesday, the Philadelphia Federal Reserve's nonmanufacturing business outlook survey tumbled to a reading of -42.7, its lowest reading since May 2020. That data followed the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey last week, which showed general activity in the sector dropped to an index reading of -26 in April, its lowest reading since April 2023 and well below the 12.5 reading the month prior. April's sharp move lower marked the fourth-largest monthly decline in history, only trailing the drop-offs in 2020 and 2008. The growing concern among economists and the Federal Reserve is that the recent rush of weak survey data could eventually lead to a decline in economic growth data. An April 7 report from the St. Louis Federal Reserve highlighted that the recent spike in economic policy uncertainty "could lead to recession conditions." "Businesses and households are saying in surveys that they are experiencing incredibly high uncertainty," Powell said this week, referencing the St. Louis Fed's work. "There's a lot of research, some of it from the Fed, showing that that does lead to businesses and households stepping back from decisions." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Sign in to access your portfolio
Yahoo
17-04-2025
- Business
- Yahoo
Federal Reserve surveys offer early look at challenges Trump's tariff plans create for US manufacturers
Respondents to recent surveys from regional Federal Reserve banks are serving as the earliest signs of how the US manufacturing industry is growing concerned about the economic outlook as the scope of President Trump's tariff plans begins to hit the business world. On Thursday, the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey showed general activity in the sector dropped to an index reading of -26 in April, its lowest reading since April 2023 and well below the 12.5 seen the month prior. April's sharp move lower marked the fourth-largest monthly decline in history, only trailing drop-offs seen in 2020 and 2008. The prices paid index, a potential sign of future inflation, shot up to 51, its highest reading since July 2022. The Philadelphia report followed a bleak survey from the New York Fed released Wednesday, which showed expectations among manufacturers plummeted this month. The New York Federal Reserve's Empire State Manufacturing Survey showed its current activity index increased to a reading of -8.1, up from -20 the month prior. But the survey's future general business index tumbled to "its second lowest reading in the more than twenty-year history of the survey," per the release. The Philly Fed's survey was conducted between April 7 and 14; the New York Fed gathered responses between April 2 and 9. The New York Fed also released its April Business Leaders Survey this week, capturing responses from across industries. It showed that the headline activity index fell to a reading of -19.8, its lowest level in more than a year. The index for future business activity expectations fell to -26.6, its lowest reading since April 2020. That survey's index for the expected future business climate hit -50, its lowest reading since 2009, "suggesting the business climate is expected to remain considerably worse than normal," according to the New York Fed's release. The souring sentiment among business leaders comes after Trump's "Liberation Day" announcements boosted the effective US tariff rate to its highest level in a century. Economists and policymakers, including Fed Chair Jerome Powell, have noted the tariffs are expected to boost inflation and slow economic growth. Read more: The latest news and updates on Trump's tariffs These concerns have so far mostly shown up in surveys like the recent regional Fed releases or measures of consumer sentiment. Whether those intentions eventually lead to spending and investment pullbacks is the economic question of the year. Blake Gwinn, head of US rates strategy at RBC Capital Markets, told Yahoo Finance on Thursday that uncertainty surrounding policy right now, not just the tariffs themselves, could continue to weigh on the economy as businesses struggle to plan out investments amid an unclear operating environment. "The uncertainty is there," Gwinn said. "You've injected it into the psyche of C-suites and consumers. It's very hard to unring that bell." An April 7 report from the St. Louis Federal Reserve highlighted that the recent spike in economic policy uncertainty "could lead to recession conditions." "Businesses and households are saying in surveys that they are experiencing incredibly high uncertainty," Powell said this week, referencing the St. Louis Fed's work. "There's a lot of research, some of it from the Fed, showing that that does lead to businesses and households stepping back from decisions." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Another big bank has slashed its stock-market outlook amid soaring economic uncertainty
HSBC is the latest big bank to cut its outlook for stocks in 2025. Strategists said the risk of a potential recession and weak economic data are weighing on the outlook. Citi also downgraded its view of US stocks earlier this month on growth concerns. HSBC is the latest banking giant to sour on the outlook for US stocks this year. In a note to clients, strategists at HSBC Securities downgraded their rating of US stocks from "overweight" to "neutral." It follows a similar move by Citi, which cut its rating of US stocks to "neutral" earlier this month. "It is important to stress that we are not turning negative on US equities — but tactically, we see better opportunities elsewhere for now. Prevailing uncertainty around tariffs could see US equities remain challenged in the next few weeks, but we are hesitant to turn too cautious on the medium-term outlook," HSBC said wrote. Max Kettner, chief multi-asset strategist at the bank, told Bloomberg Television that he believes that the economy is going through a "confidence and a sentiment shock." Kettner pointed to the growing risk of a looming economic slowdown, given recent weakness in economic survey data. For one, manufacturing looks to be on weak footing. Activity in the sector and expectations for future activity dropped for the second month in a row in March, while expectations for new orders and shipments also took a hit, according to the Philadelphia Fed's latest Manufacturing Business Outlook Survey. Expectations for the job market are also falling. The Conference Board's Present Situation Index, which measures how consumers feel about the outlook for their income, business activity, and the labor market, fell to a level of 65.2, the lowest in 12 years, the Conference Board said. Levels for the index are well below the key threshold of 80, which has typically been consistent with recessions. "But I do fear that we've seen too much damage, and especially too much broad-based damage in the survey and the broad-based data in order to dismiss it as a one-off," Kettner told Bloomberg on Wednesday. "I don't think this will take three, four, five months. I don't think this is going to be a recession that is basically coming sometime in the second half. I do fear that we might get a pretty sharp slowdown in the data very early on, and very very soon," he added. In a note downgrading its outlook for US stocks earlier in March, Citi also cited growth concerns in their outlook for the market. Strategists, meanwhile, upgraded their rating on Chinese stocks from "neutral" to "overweight," pointing to stronger growth expectations in the nation. "In the big picture, US equity outperformance may well return when the AI narrative takes over again, but in the coming months, we expect US growth momentum to undershoot," the bank wrote. Meanwhile, Goldman Sachs, RBC, and Barclays have also trimmed their price targets for the S&P 500, reflecting more muted expectations for the US market after Wall Street entered 2025 on a wave of bullish sentiment boosted by Trump's policies. Read the original article on Business Insider Sign in to access your portfolio
Yahoo
27-03-2025
- Business
- Yahoo
Another big bank has slashed its stock-market outlook amid soaring economic uncertainty
HSBC is the latest big bank to cut its outlook for stocks in 2025. Strategists said the risk of a potential recession and weak economic data are weighing on the outlook. Citi also downgraded its view of US stocks earlier this month on growth concerns. HSBC is the latest banking giant to sour on the outlook for US stocks this year. In a note to clients, strategists at HSBC Securities downgraded their rating of US stocks from "overweight" to "neutral." It follows a similar move by Citi, which cut its rating of US stocks to "neutral" earlier this month. "It is important to stress that we are not turning negative on US equities — but tactically, we see better opportunities elsewhere for now. Prevailing uncertainty around tariffs could see US equities remain challenged in the next few weeks, but we are hesitant to turn too cautious on the medium-term outlook," HSBC said wrote. Max Kettner, chief multi-asset strategist at the bank, told Bloomberg Television that he believes that the economy is going through a "confidence and a sentiment shock." Kettner pointed to the growing risk of a looming economic slowdown, given recent weakness in economic survey data. For one, manufacturing looks to be on weak footing. Activity in the sector and expectations for future activity dropped for the second month in a row in March, while expectations for new orders and shipments also took a hit, according to the Philadelphia Fed's latest Manufacturing Business Outlook Survey. Expectations for the job market are also falling. The Conference Board's Present Situation Index, which measures how consumers feel about the outlook for their income, business activity, and the labor market, fell to a level of 65.2, the lowest in 12 years, the Conference Board said. Levels for the index are well below the key threshold of 80, which has typically been consistent with recessions. "But I do fear that we've seen too much damage, and especially too much broad-based damage in the survey and the broad-based data in order to dismiss it as a one-off," Kettner told Bloomberg on Wednesday. "I don't think this will take three, four, five months. I don't think this is going to be a recession that is basically coming sometime in the second half. I do fear that we might get a pretty sharp slowdown in the data very early on, and very very soon," he added. In a note downgrading its outlook for US stocks earlier in March, Citi also cited growth concerns in their outlook for the market. Strategists, meanwhile, upgraded their rating on Chinese stocks from "neutral" to "overweight," pointing to stronger growth expectations in the nation. "In the big picture, US equity outperformance may well return when the AI narrative takes over again, but in the coming months, we expect US growth momentum to undershoot," the bank wrote. Meanwhile, Goldman Sachs, RBC, and Barclays have also trimmed their price targets for the S&P 500, reflecting more muted expectations for the US market after Wall Street entered 2025 on a wave of bullish sentiment boosted by Trump's policies. Read the original article on Business Insider Sign in to access your portfolio
