The Economy of the United States and Europe
2023-08-29
US Economy >> The impact of rising interest rates on residential sales and equipment investment in the US economy is still limited
The European Economy >> Implies Weakness in Service Industry Activity and Personal Consumption
In July, second-hand residential sales (calculated at an annual rate of 4.07 million households, a decrease of 2.2% month-on-month) decreased for two consecutive months. Sales inventory (3.3 months), although still at a relatively low level, has risen for four consecutive months. The sales price (median, $407000) continues to rise, but residential loan interest rates have risen, and it is expected that weak demand will continue after August.
Durable goods orders decreased significantly in July (down 5.2% month-on-month). However, mainly due to the decline in volatile aircraft, non-defense capital goods orders (excluding aircraft, a month-on-month increase of 0.1%) have increased for two consecutive months, which is a leading indicator of private equipment investment. The level is still in a stable region, and no obvious signs of a decline in equipment investment have been observed.
The Chicago Federal Reserve's US Activity Index for July (0.12, an increase of 0.45 percentage points month-on-month) rose to a positive range for the first time in three months, indicating a return to growth beyond the trend. However, excluding the impact of short-term fluctuations, the three-month average (-0.13, an increase of 0.02 percentage points month-on-month) remains below the downward trend, indicating that the sustainability of the current economic recovery is currently the focus of attention.
In June, the euro zone's current account balance (surplus of 35.8 billion euros) expanded to a significant surplus in a single month since February 2021. The expansion of fiscal revenue and expenditure surplus is the main contribution while reflecting the first income and expenditure, including interest and dividends generated from external debts, which are converted into surplus.
The preliminary value of the Eurozone Purchasing Managers' Index in August showed that the manufacturing industry (43.7, an increase of 1.0 percentage points month-on-month) had risen for seven consecutive months, while the service industry (48.3, a decrease of 2.6 percentage points month-on-month) had decreased for four consecutive months, falling below 50 for the first time, indicating a contraction in activity. In the manufacturing industry, major indicators such as production and new orders have increased, indicating a slowdown in the pace of activity contraction. However, in the service industry, business activities and new orders have decreased, hindering the expansion momentum of confirmed activities.
The preliminary value of the Eurozone consumer confidence index in August (-16.0, a decrease of 0.9 percentage points month-on-month) has been declining for five consecutive months. Although the economic growth rate continues to slow down, the improvement in consumer confidence continues, but now there are signs of deterioration, indicating that consumer activity is stagnating.
The European Economy >> Implies Weakness in Service Industry Activity and Personal Consumption
In July, second-hand residential sales (calculated at an annual rate of 4.07 million households, a decrease of 2.2% month-on-month) decreased for two consecutive months. Sales inventory (3.3 months), although still at a relatively low level, has risen for four consecutive months. The sales price (median, $407000) continues to rise, but residential loan interest rates have risen, and it is expected that weak demand will continue after August.
Durable goods orders decreased significantly in July (down 5.2% month-on-month). However, mainly due to the decline in volatile aircraft, non-defense capital goods orders (excluding aircraft, a month-on-month increase of 0.1%) have increased for two consecutive months, which is a leading indicator of private equipment investment. The level is still in a stable region, and no obvious signs of a decline in equipment investment have been observed.
The Chicago Federal Reserve's US Activity Index for July (0.12, an increase of 0.45 percentage points month-on-month) rose to a positive range for the first time in three months, indicating a return to growth beyond the trend. However, excluding the impact of short-term fluctuations, the three-month average (-0.13, an increase of 0.02 percentage points month-on-month) remains below the downward trend, indicating that the sustainability of the current economic recovery is currently the focus of attention.
In June, the euro zone's current account balance (surplus of 35.8 billion euros) expanded to a significant surplus in a single month since February 2021. The expansion of fiscal revenue and expenditure surplus is the main contribution while reflecting the first income and expenditure, including interest and dividends generated from external debts, which are converted into surplus.
The preliminary value of the Eurozone Purchasing Managers' Index in August showed that the manufacturing industry (43.7, an increase of 1.0 percentage points month-on-month) had risen for seven consecutive months, while the service industry (48.3, a decrease of 2.6 percentage points month-on-month) had decreased for four consecutive months, falling below 50 for the first time, indicating a contraction in activity. In the manufacturing industry, major indicators such as production and new orders have increased, indicating a slowdown in the pace of activity contraction. However, in the service industry, business activities and new orders have decreased, hindering the expansion momentum of confirmed activities.
The preliminary value of the Eurozone consumer confidence index in August (-16.0, a decrease of 0.9 percentage points month-on-month) has been declining for five consecutive months. Although the economic growth rate continues to slow down, the improvement in consumer confidence continues, but now there are signs of deterioration, indicating that consumer activity is stagnating.