Key facts
- U.S. services sector activity dipped in June.
- The ISM services PMI in the U.S. fell to 54.0 in June.
- U.S. services sector employment rebounded in June.
- Australian job advertisements increased by 1.8% in June.
- Australian job ads reached a 12-month high in June.
- German industrial orders rose 1.9% in May.
- Investor morale in the euro zone improved to -3.1 points in July.
- The Bank of Israel cut its key interest rate by 25 basis points to 3.5%.
- Canadian businesses have lowered their inflation expectations.
- The euro zone economy has not returned to its pre-war state.
Global economic activity presents a mixed picture, with the U.S. services sector showing a slowdown in June. The ISM services PMI fell to 54.0 from 54.5 in May, indicating eased order growth. However, employment in the sector rebounded after three months of contraction, suggesting continued labor market stability. The U.S. job market overall added fewer positions in June compared to May, but the unemployment rate saw a slight decrease, pointing to ongoing economic resilience.
In contrast, other regions show signs of strengthening or stabilization. Australian job advertisements rose by 1.8% in June, reaching their highest level in 12 months, according to ANZ-Indeed data. This rebound follows two months of declines and suggests sustained elevated labor demand despite higher borrowing costs. German industrial orders increased by 1.9% in May, surpassing analyst expectations, with a 1.0% rise in new orders excluding large contracts. Investor morale in the euro zone improved significantly in July, with the Sentix survey showing a rise to -3.1 points from -13.4 in June, surpassing forecasts and indicating growing confidence, particularly in Germany where economic expectations turned positive for the first time since March.
Central banks are adjusting their policies in response to these economic shifts. The Bank of Israel lowered its benchmark interest rate by 25 basis points to 3.5%, its second consecutive cut. This decision was influenced by stable inflation and reduced energy prices due to a U.S.-Iran ceasefire, though geopolitical uncertainties remain a concern. Canadian businesses have also lowered their expectations for high inflation following the Middle East ceasefire and reduced trade concerns, according to a Bank of Canada survey, ahead of the central bank's next interest rate decision. Despite these positive signs, European Central Bank board member Isabel Schnabel stated that the euro zone economy has not returned to its pre-war state, citing persistent core inflation and ongoing price pressures, warning that new shocks could further impact food prices.