US business activity stalls, German GDP expected to shrink, and other economics news to read this week
US business activity stalls, German GDP expected to shrink, and other economics news to read this week
This weekly round-up brings you the latest stories from the world of economics and finance.
Top economy stories: US business activity stalls in September; German GDP forecast to contract this year; Singapore announces new funding to help with cost-of-living crisis.
1. US business activity stalls in September
US business activity has been practically at a standstill this month, with the services sector growing at its slowest pace since February, while new order activity dropped to its lowest level this year.
S&P Global’s US Composite PMI index dipped to a reading of 50.1 in September, with 50 marking the line between expansion and contraction.
“PMI data for September added to concerns regarding the trajectory of demand conditions in the US economy following interest rate hikes and elevated inflation,” said S&P Global Market Intelligence Principal Economist Siân Jones.
It comes following second-quarter GDP growth of 2.1% – a number that was left unrevised after the country announced its third GDP estimate for April-June.
However, revised government data show that US GDP was weaker than previously thought in every first quarter from 2020 to 2022.
2. German GDP predicted to shrink this year
The German economy will shrink this year, according to forecasts from five economic institutes.
They predict a 0.6% decline in GDP, marking a deterioration from a forecast for 0.3% contraction made earlier this year.
“The most important reason for this revision is that industry and private consumption are recovering more slowly than we expected in spring,” said Oliver Holtemoeller, head of the macroeconomics department at the Halle Institute for Economic Research.
However, the downturn is not expected to last. For 2024, the forecast rises to 1.3% growth, followed by a 1.5% expansion in 2025.
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