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Tag: economic sentiment data

  • China Manufacturing Gauge Signals Weaker Growth Momentum

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    A private gauge of China’s manufacturing activity showed Chinese factories continued to expand production in October, albeit at a slower pace, signaling weaker growth momentum heading into the fourth quarter of the year.

    The RatingDog China General Manufacturing Purchasing Managers’ Index, compiled by S&P Global, declined to 50.6 last month from 51.2 in September, according to a statement released Monday.

    Copyright ©2025 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • German Business Sentiment Worsened for Fifth Straight Month in September

    German Business Sentiment Worsened for Fifth Straight Month in September

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    By Ed Frankl

    Business sentiment in Germany weakened even further in September, the fifth consecutive month of decline, with the economic outlook remaining bleak in Europe’s largest economy, according to a survey of companies.
    

    The Ifo business-climate index declined slightly to 85.7 in September from a revised 85.8 in August, data from the Ifo Institute said Monday.
    

    

    The reading was better than the expectations of 85.0 from economists polled by The Wall Street Journal.
    

    Write to Ed Frankl at edward.frankl@wsj.com
    

    

    

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    Consumer sentiment hits 22-month high on easing inflation
    
			
    Consumer sentiment hits 22-month high on easing inflation
    
			
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    The numbers: A survey of consumer sentiment survey reached a 22-month high of 71.6 in July, helped by a slowdown in inflation and a robust jobs market.
    

    The final reading of the sentiment survey slipped from a preliminary 72.6 in early July, but it was up sharply from 64.4 in June, the University of Michigan said Friday.
    

    

    The consumer-sentiment survey reveals how consumers feel about their own finances as well as the broader economy. 
    

    Also read: U.S. inflation eases again, PCE shows. Prices rise at slowest pace in almost two years
    

    The index has risen in fits and starts from an all-time low of 50 last year. The index rose to as high as 101 shortly before the onset of the pandemic in 2020. 
    

    Key details: A gauge that measures what consumers think about the current state of the economy registered 76.6 at the end of July vs. an initial 77.5.
    

    A measure that asks about expectations for the next six months slipped to 68.3 from an initial 69.4 in early July.
    

    Both indexes are up sharply from June, however.
    

    Americans think inflation will average 3.4% in the next year.
    

    Big picture: Americans are less worried about a recession. Unemployment is low, wages are rising and inflation has eased. 
    

    Yet the economy is likely to face more turbulence ahead because of higher interest rates orchestrated by the Federal Reserve to bring inflation down even further.
    

    Higher borrowing costs usually depress business investment and consumer spending, increase layoffs and slow the economy.
    

    Looking ahead: “Overall, the sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets,” said Joanne Hsu, director of the survey. “However, sentiment for lower-income consumers fell.”
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        +0.50%
    
       and S&P 500
    
        SPX,
    
        +0.99%
    
       rose in Friday trades.
    

    

    

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    U.S. economy grows at slowest pace in 5 months. Inflation ‘sticky,’ S&P says
    
			
    U.S. economy grows at slowest pace in 5 months. Inflation ‘sticky,’ S&P says
    
			
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    The numbers: The U.S. economy grew at the slowest pace in five months in July, a pair of S&P surveys showed, and pointed to weaker conditions later in the year. 
    

    The S&P flash U.S. services-sector index fell to 52.4 from  54.4 in the prior month. That’s the lowest reading since February.
    

    

    Most Americans are employed on the service side of the economy, in areas such as  technology, healthcare,  finance and hospitality.
    

    The S&P U.S. manufacturing-sector index, meanwhile, rose to 49 from 46.3, but it has been negative for months.
    

    The S&P Global surveys are among the first indicators each month to provide an assessment of the health of the economy. Any number above 50 signals expansion, while numbers below 50 point to contraction. 
    

    One caveat: The S&P Global surveys have been more negative this year than other indicators of the U.S. economy.
    

    Key details: New orders, a sign of demand, rose slightly but were relatively soft. Hiring was also the weakest since January.
    

    Prices continued to rise for both raw materials and labor. 
    

    “The stickiness of price pressures meanwhile remains a major concern,” said Chris Williamson, chief business economist at S&P Global. “[F]urther falls in the rate of inflation below 3% may prove elusive in the near term.”
    

    Big picture: The large service side of the economy is keeping the U.S. forging ahead, but it might be losing some steam. The Federal Reserve is expected to raise interest rates again this week, and higher borrowing costs have trimmed the sails of the economy. 
    

    Manufacturers, for their part, are lagging well behind and arguably are already in a recession of sorts.
    

    Not just in the U.S., either. Manufacturers are struggling even more in Europe and other parts of the world as consumers shift spending to services from goods.
    

    Read: Eurozone Economy Contracts Further in July, PMIs Suggest
    

    A recession still appears far off, however. A new survey of business economists shows that 71% think a U.S. downturn is at least a year away.
    

    Looking ahead: “July is seeing an unwelcome combination of slower economic growth, weaker job creation, gloomier business confidence and sticky inflation,” Williamson said. “Business optimism about the year-ahead outlook has deteriorated sharply to the lowest seen so far this year.”
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        +0.52%
    
       and S&P 500
    
        SPX,
    
        +0.40%
    
       rose in Monday trades.
    

    

    

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    German Business Sentiment Fell in June as Manufacturing Outlook Worsens
    
			
    German Business Sentiment Fell in June as Manufacturing Outlook Worsens
    
			
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    By Ed Frankl
    

    Business sentiment in Germany worsened in June for the second month in a row, with weakness in the manufacturing sector leading to a bleaker outlook for the German economy.
    

    The Ifo business-climate index declined to 88.5 in June from 91.5 in May, according to data from the Ifo Institute published Monday.
    

    

    The reading missed expectations of 90.5 according to economists polled by The Wall Street Journal.
    

    “Expectations were markedly pessimistic and companies’ assessments of their current situations were worse,” Clemens Fuest, president of the Ifo Institute, said.
    

    The index assessing the expectations for the next six months tumbled to 83.6 in June from 88.3 in May, and the indicator gauging current business conditions also fell, to 93.7 from 94.8, the survey said.
    

    In manufacturing, the business climate deteriorated substantially, while business expectations also fell significantly, declining to their lowest level since November 2022, the survey said.
    

    “The weakness in the manufacturing sector is steering the German economy into turbulent waters,” Fuest said.
    

    Elsewhere, there were also declines in the climate indexes for the services, trade and construction sectors, Ifo said.
    

    The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
    

    Write to Ed Frankl at edward.frankl@wsj.com
    

    

    

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    U.S. consumer sentiment rebounds slightly in late May, but worries persist
    
			
    U.S. consumer sentiment rebounds slightly in late May, but worries persist
    
			
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    The numbers: The final reading of a consumer-sentiment survey in May rebounded slightly to 59.2, but Americans remained worried about the future of the economy, especially against the backdrop of another fight in Washington over the debt ceiling.
    

    The index, produced by the University of Michigan, registered a six-month low of 57.7 earlier in May. The index sank from 62 in April.
    

    

    The consumer-sentiment survey reveals how consumers feel about their own finances as well as the broader economy. 
    

    Americans are worried about the possibility of recession and threat posed by a stalemate in talks between Democrats and Republicans on raising the U.S. debt limit. A similar impasse in 2011 also hurt consumer sentiment.
    

    Sentiment is far below a recent peak of 88.3 in 2021 and a prepandemic high of 101. The index dropped to an all-time low of 50 last summer.
    

    Key details: A gauge that measures what consumers think about the current state of the economy edged up to 64.9 from an initial 64.5 in May.
    

    A measure that asks about expectations for the next six months also partly recovered to 55.4 from a preliminary 53.4 in May.
    

    Both indexes are still quite low, however.
    

    Inflation expectations haven’t changed much. Americans also think inflation will average just above 3% annually in the next five years.
    

    Big picture: Higher borrowing costs have depressed purchases of houses and many other big-ticket items and put the brakes on U.S. growth. Yet even though the economy is more fragile now, there’s still no sign of a pending recession.
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        +1.00%
    
       and S&P 500
    
        SPX,
    
        +1.30%
    
       rose in Friday trades.
    

    

    

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    U.S. economy speeds up in March, S&P finds, but so does inflation
    
			
    U.S. economy speeds up in March, S&P finds, but so does inflation
    
			
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    The numbers: The U.S. economy accelerated in March,  S&P Global surveys showed, but so did inflation as companies raised selling prices.
    

    The S&P Global Flash U.S. services-sector index rose to an 11-month high of 53.8 from 50.5 in the prior month.  Most Americans are employed on the service side of the economy.
    

    

    The S&P Global U.S. manufacturing sector index, meanwhile, increased to 49.3 from 47.3. That’s a five-month high.
    

    Any number above 50 points to expansion. Figures below that signal contraction. 
    

    The S&P Global surveys are among the first indicators each month to assess the health of the economy. 
    

    Key details: New orders, a sign of future sales, rose for the first time since last September at service-oriented companies.
    

    Booking at manufacturers fell again, but at the slowest pace in six months. More positively, production increased for the first time since last September.
    

    Employment rose across the economy as both service companies and manufacturers said they added new workers. 
    

    On the downside, the increase in demand allowed companies to raise prices at the fastest pace in five months.
    

    Business leaders said rising costs, especially labor, contributed to their decision to raise prices.  
    

    That’s not good news for Federal Reserve officials who worry that rising wages could make it harder to get high inflation under control.
    

    Big picture: The service and industrial sides of the economies are following different trajectories.
    

    Americans are spending relatively more money on services such as travel and eating out and spending less on goods. As a result, service companies are still hiring and growing at a faster clip.
    

    Manufacturers are basically treading water due to the shift in consumer spending patterns as well as the depressive effects of higher inflation and interest rates.
    

    Adding it all up, though, the S&P reports paint the picture of a expanding economy that is not on the doorstep of recession.
    

    What remains to be seen is how much the recent stress in the banking sector hurts lending and makes it harder for businesses to borrow and invest.
    

    Looking ahead: “March has so far witnessed an encouraging resurgence of economic growth,” said Chris Williamson, chief business economist at S&P Global. 
    

    “There is also some concern regarding inflation,” he said. “The inflationary upturn is now being led by stronger service sector price increases, linked largely to faster wage growth.”
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        -0.17%
    
       and S&P 500
    
        SPX,
    
        -0.13%
    
       fell in Friday trades.
    

    

    

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    Consumer sentiment falls for first time in four months — and that was before Americans knew about SVB
    
			
    Consumer sentiment falls for first time in four months — and that was before Americans knew about SVB
    
			
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    The numbers: A survey of consumer sentiment slid to 63.4 in March and fell for the first time in four months, reflecting angst among Americans about high inflation and the health of the economy.   
    

    The preliminary reading in March was down from 67 in February, the University of Michigan said. Most of the survey was completed before the collapse of Silicon Valley Bank.
    

    

    Consumer sentiment helps gauge how Americans feel about their own finances as well as the broader economy.
    

    The index had fallen to a record low of 50 last summer before partly rebounding. Sentiment is still well below a recent peak of 88.3 in 2021, however, and a pre-pandemic high of 101.
    

    Inflation expectations tapered off a bit but remained fairly high. Consumers expect prices to increase 3.8% in the next year, down from 4.1% in the prior month. That’s the lowest reading since April 2021.
    

    Key details: A gauge that measures what consumers think about the current state of the economy dropped to 66.4 in March from 70.7in the prior month.
    

    Sentiment fell the most among lower-income and younger Americans who tend to suffer disproportionately from high inflation. Some wealthier people with large stock holdings were also less confident in light of a recent decline in equities. 
    

    Another measure that asked about expectations for the next six months declined to 61.5 from a prior 64.7.
    

    Americans think inflation will persist for some time. In the longer run, consumers believe inflation will increase about 2.8% a year, down slightly from 2.9% in the prior month.
    

    That’s still well above the Federal Reserve’s 2% target, however.
    

    Fed officials pay close attention to inflation expectations because they could be a harbinger of future price trends.
    

    The rate of inflation over the past 12 months is 6%, based on the consumer-price index. It’s fallen from a 40-year peak of 9.1% last summer.
    

    Big picture: Consumer sentiment is still far below levels associated with a healthy economy and it’s hard to see a big improvement anytime soon.
    

    The Fed is raising interest rates to tame high inflation, a strategy that typically slows the economy.
    

    Higher rates have also destabilized parts of the U.S. financial system as witnessed by the sudden collapse of Silicon Valley Bank. That’s adding new stress on the economy.
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        -1.19%
    
       and S&P 500
    
        SPX,
    
        -1.10%
    
       fell in Friday trades amid nagging worries about the U.S. financial system after the SVB failure  
    

    

    

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    German Ifo business sentiment hit seven-month high in January
    
			
    German Ifo business sentiment hit seven-month high in January
    
			
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    Business confidence in Germany improved in January to its highest level since June, adding to signs of resilient activity at the beginning of the year as optimism returns amid easing concerns over an imminent recession.
    

    The Ifo business-climate index rose to 90.2 in January from 88.6 in December, posting a fourth-consecutive monthly improvement, data from the Ifo Institute showed Wednesday. The rise is broadly in line with expectations from economists polled by The Wall Street Journal.
    

    January…
    
    

    

    

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    Consumer sentiment jumps to 9-month high as inflation ebbs and stocks rebound
    
			
    Consumer sentiment jumps to 9-month high as inflation ebbs and stocks rebound
    
			
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    The numbers: A survey of consumer sentiment rose to 64.6 in January and hit a nine-month high, reflecting easing worries about inflation and Americans’ greater confidence in their own finances.
    

    The index increased from a revised 59.7 in December, the University of Michigan said.
    

    

    Consumer sentiment is still weak, though. The index is well off a Coronavirus-era peak of 88.3 in April 2021 and a pre-pandemic high of 101. 
    

    Key details: A gauge that measures what consumers think about their financial situation — and the current health of the economy — climbed to 68.6 last month. One year ago, the index stood at 72.
    

    Another measure that asks about expectations for the next six months moved up to 62 from 59.9 in the prior month. It’s also just a few notches below year-ago levels.
    

    Americans viewed inflation as less of a threat. They expected the inflation rate in the next year to average about 4%, down from 4.4% in the prior month.
    

    In the longer run, consumers said they see inflation falling toward 3% — above the Federal Reserve’s 2% target. Top Fed officials pay close attention to inflation expectations because they could be a harbinger of future price trends.     
    

    The current 12-month rate of inflation is 6.5%, based on the consumer-price index. It’s fallen from a peak of 9.1% last summer.
    

    Big picture:  Cheaper gas, rebounding stock prices and ebbing inflation have given Americans more reason for hope.
    

    Yet rising interest rates and the threat of recession are leaving Americans on edge. The Fed is rapidly lifting rates to tame high inflation, but its get-tough approach has also increased the odds of a recession. 
    

    Looking ahead: “While that is the highest reading in nine months,” said U.S. economist Andrew Hunter at Capital Economics, the relatively low reading suggests “consumers remain unusually downbeat.”
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        +0.33%
    
       and S&P 500
    
        SPX,
    
        +0.40%
    
       fell slightly in Friday trades.
    

    

    

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    Consumer sentiment creeps up at year end as worries about inflation ease
    
			
    Consumer sentiment creeps up at year end as worries about inflation ease
    
			
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    The numbers: A survey of consumer sentiment rose to 59.7 in December, buoyed by falling gas prices and a rebound in stocks earlier in the month. Yet Americans are generally pessimistic about the economy.  
    

    The final reading in the sentiment poll marked a small increase from the initial 59.1 result earlier in the month, the University of Michigan reported.
    

    

    The index increased from 56.8 in November.
    

    Consumer sentiment is still extremely weak, however. The index fell to a record low of 50 in June, just half as much as the 101 reading in the last month before the pandemic in 2020.
    

    Key details: A gauge that measures what consumers think about their financial situation — and the current health of the economy — rose slightly to 59.4 last month. One year ago, the index stood much higher at 74.2.
    

    Another measure that asks about expectations for the next six months registered 59.9, up from 55.6 in November. It was also well below year-ago levels, though.
    

    Americans view inflation as somewhat less of a threat. They expect the inflation rate in the next year to average about 4.4%, compared to 4.9% in the prior month.
    

    In the longer run, consumers see inflation falling toward 2.9%.
    

    Top Federal Reserve officials pay close attention to inflation expectations because it could be a harbinger of future price trends.     
    

    The current 12-month rate of inflation is 7.1%, based on the consumer-price index. It’s fallen from a peak of 9.1% last summer.
    

    Big picture:  Falling gas prices and a slowdown in inflation have given consumers something to cheer about during the holidays. But they consumers are worried about what the future will bring. 
    

    The Federal Reserve is rapidly raising interest rates to slow inflation even further, but higher borrowing costs are weakening the economy. That’s likely to result in rising unemployment in 2023 — and perhaps even a recession.
    

    Looking ahead: “While the sizable decline in short-run inflation expectations may be welcome news, consumers continued to exhibit substantial uncertainty over the future path of prices,” said survey director Joanne Hsu.
    

    Market reaction: The Dow Jones Industrial Average
    
        DJIA,
    
        +0.53%
    
       and S&P 500
    
        SPX,
    
        +0.59%
    
       XXX in Friday trades.
    

    

    

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    German business sentiment improves in November
    
			
    German business sentiment improves in November
    
			
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    Business confidence in Germany increased in November, beating expectations, as companies foresee a less severe recession than previously expected.
    

    The Ifo business-climate index rose to 86.3 points in November from a revised reading of 84.5 points in October, data from the Ifo Institute showed Thursday. Economists polled by The Wall Street Journal had expected the index to come in at 85.0.
    

    

    While companies were somewhat less satisfied with their current business, pessimism regarding the coming months reduced sharply, Ifo President Clemens Fuest said in the report.
    

    The index of the current situation fell to 93.1 in November from 94.2 in October, while the gauge assessing companies’ expectations rose to 80.0 from 75.9.
    

    The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
    

    Write to Maria Martinez at maria.martinez@wsj.com
    

    

    

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    German Business Sentiment Remains Depressed in October
    
			
    German Business Sentiment Remains Depressed in October
    
			
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    By Maria Martinez
    

    Business confidence in Germany fell slightly in October, remaining at a very low level, as companies expect a challenging winter due to the energy crisis.
    

    The Ifo business-climate index fell to 84.3 points in October from a revised reading of 84.4 points in September, data from the Ifo Institute showed Tuesday. This is its lowest value since May 2020. Economists polled by The Wall Street Journal had expected the index to come in at 83.6.
    

    

    “The German economy is facing a difficult winter,” Ifo President Clemens Fuest said. Companies were less satisfied with their current business, while their expectations improved, he said.
    

    The index of the current situation fell to 94.1 in October from 94.5 in September, while the gauge assessing companies’ expectations rose to 75.6 from 75.3.
    

    The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction. The decline in confidence is affecting mainly manufacturing and construction, the report shows.
    

    Write to Maria Martinez at maria.martinez@wsj.com
    

    

    

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    Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief
    
			
    Stock market bulls have a new story to sell you. Don’t believe them — they’re just in the ‘bargaining’ stage of grief
    
			
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    Might the bear market’s losses at its recent low have gotten so bad that it was actually good news?
    

    Some eager stock bulls I monitor are advancing this convoluted rationale. The outline of their argument is that when things get bad enough, good times must be just around the corner.
    

    But their argument tells us more about market sentiment than its prospects.
    

    

    At the market’s recent closing low, the S&P 500
    
        SPX,
    
        +1.19%
    
       had dropped to 25% below its early-January high. According to one version of this “so-bad-it’s-good” argument, the stock market in the past was a good buy whenever bear markets fell to that threshold. Following those prior occasions, they contend, the market was almost always higher in a year’s time.
    

    This is not an argument you’d normally expect to see if the recent low represented the final low of the bear market. On the contrary, it fits squarely within the third of the five-stage progression of bear market grief, about which I have written before: denial, anger, bargaining, depression and acceptance.
    

    With their argument, the bulls are trying to convince themselves that they can survive the bear market, rationalizing that the market will be higher in a year’s time. As Swiss-American psychiatrist Elisabeth Kübler-Ross put it when creating this five-stage scheme, the key feature of the bargaining stage is that it is a defense against feeling pain. It is far different than the depression and eventual acceptance that typically come later in a bear market.
    

    Though not all bear markets progress through these five stages, most do, as I’ve written before. Odds are that we have two more stages to go through. That suggests that the market’s rally over the past couple of weeks does not represent the beginning of a major new bull market.
    

    Numbers don’t add up
    

    Further support for this bearish assessment comes from the discovery that the bulls’ argument is not supported historically. Only in relatively recent decades was the market reliably higher in a year’s time following occasions in which a bear market had reached the 25% pain threshold. It’s not a good sign that the bulls are basing their optimism on such a flimsy foundation.
    

    Consider what I found upon analyzing the 21 bear markets since 1900 in the Ned Davis Research calendar in which the Dow Jones Industrial Average
    
        DJIA,
    
        +1.34%
    
       fell at least 25%. I measured the market’s one-year return subsequent to the day on which each of these 21 bear markets first fell to that loss threshold. In seven of the 21 cases, or 33%, the market was lower in a year’s time.
    

    That’s the identical percentage that applies to all days in the stock market over the past century, regardless of whether those days came during bull or bear markets. So, based on the magnitude of the bear market’s losses to date, there’s no reason to believe that the market’s odds of rising are any higher now than at any other time.
    

    This doesn’t mean that there aren’t good arguments for why the market might rise. But the 25%-loss concept isn’t one of them.
    

    Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.
    

    

    

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