ACTV - Service Sector Slowdown Adds To Worries On U.S. Growth Prospects
2024-07-03 15:20:00 ET
Summary
- Broad-based weakness in the ISM services index coupled with an upward trend in jobless claims suggests that the pieces are falling into place regarding a September interest rate cut from the Federal Reserve.
- The Fed is signalling just one cut this year, the consensus and market expects two.
- We continue to see the risk of three rate cuts in 2024.
By James Knightley
Softening data intensifies downturn fears
Today’s data has offered more evidence of a cooling economy and softening jobs market. Initial claims continue trending higher, albeit slowly, while continuing claims rose to their highest level since November 2021. This suggests that while firing rates remain low, if you do unfortunately lose your job, it is becoming much harder to find a new position. However, the really eye-catching release is the truly dismal ISM services index for June. It dropped to 48.8 from 53.8 (consensus 52.7)....
Service Sector Slowdown Adds To Worries On U.S. Growth Prospects