US Markets
Eurozone's Private Sector Output Stabilizes in June Amid Cooling Inflation
Private sector output in the euro area saw a stabilization in June as inflationary pressures eased and growth in manufacturing offset a slower decrease in the services sector, after two months of decline.The seasonally adjusted S&P Global Eurozone Composite PMI Output Index rose to 50 in June from the previous month's 48.5 and the flash estimate of 49.5, final data from S&P Global showed Friday. The latest reading marks a three-month high and the first time the index has moved out of the contraction zone since March.On the services side, the PMI reached its highest level in three months at 49.4, against the prior 47.7 and the initial reading of 48.9, indicating an overall "marginal" rate of decline in business activity among service providers.Italy, Spain and Ireland logged an increase in overall business activity in June, while the downturn in Germany and France, the bloc's two largest economies, eased from the prior month. The rest of the euro area, meanwhile, achieved stability despite seeing a reduction in demand and new business volumes."A key drag on economic growth since the outbreak of the war in the Middle East has been the subduing of demand from consumers due to the energy price spike, but these inflationary pressures have shown signs of cooling markedly in June. Input cost inflation in the service sector fell in June to the greatest extent since data were first available in 1998, barring only that seen in the COVID-19 lockdowns of early 2020," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "This has helped support a revival of growth of services activity in some of the sectors which had been hardest hit by the war, notably leisure and tourism."Business confidence further improved across the bloc in June, reaching a four-month high, with companies' growth outlook over the next 12 months at its most optimistic since the outbreak of the war.
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