- Core price index increase reverses earlier weakening.
- Real spending moves lower.
- Disposable income’s decline lowers savings rate.
USA| Jun 27 2025U.S. Core PCE Price Inflation Strengthens in May; Real Spending Eases as Income Weakens
by:Tom Moeller
|in:Economy in Brief
Europe| Jun 27 2025EMU Sentiment Indicators from EU Commission Show Easing
The EU Commission indexes for June 2025 shows erosion in the overall index to a level of 94 compared to 94.8 in May. The readings for France have become particularly weak in the last two months. As shown in the chart, it is apparent that the reading for France has fallen quite sharply during this period. France has posted index declines of 3.7% in consecutive months; these are quite large declines. The cumulative two-month drop for France has been larger less than 5% of the time back to 2015; Romania and Denmark (EU Member) also has experienced relatively sharp drops in the last two months. While Portugal and Belgium have experienced top 5% to 7% increases in the last two months. Germany has generally improved although it backed off in the current month. The euro area reading has been in a state of minor erosion; Italy is currently in a several month phase of having bounced back from a period of weakness. All-in-all it has not been a particularly good period for the European monetary union or in its large economies with the exception of Germany.
Sector performance The five sector or environmental readings that we have for the Monetary Union show erosion on the month for three of five of the readings. Improving month-to-month is the services sector which moved to a reading of +3 in June from +2 in May. The construction sector moved to a reading of -3 in June from -4 in May; however, eroding is the reading for retailing that fell to -8 from -7 in May; consumer confidence edged lower to -15.3 from -15.1 in May; and the industrial sector reading fell to -12 from -10 in May. The improvement is in the cyclical and small employment sector of construction but also in the major employment sector of services. Meanwhile the all-important manufacturing or industrial sector has eroded on the month and this is the sector we are focused on - and concerned about - particularly with tariffs in flux.
Rankings or standings by industry As of June, the overall European monetary union index has a 23.5 percentile standing on data since about 1990 while the industrial sector standing is in its 16th percentile, consumer confidence in its 18th percentile, and services standing in their 24th percentile. Retailing has a 46.4 percentile standing that moves it up closer to its median for the period (median readings on ranked data occur at a ranking of 50%). So, retailing is getting closer to a median performance while construction is above its median with a standing in its 77.5 percentile.
Global| Jun 26 2025Charts of the Week: Calmer on the Surface, Cracks Beneath
Financial markets have been on a geopolitical rollercoaster in recent days. The Iran–Israel flare-up briefly sent oil prices surging and risk assets tumbling, but tensions have since eased and market conditions have stabilised. That calm has refocused attention on underlying fundamentals—and the signals are mixed. Business surveys and Asian trade data (charts 1 and 2) suggest global growth momentum has held up well, despite the recent US tariff shock. But consumers are painting a more cautious picture: confidence remains subdued across the US, UK, and Eurozone, pointing to a more fragile backdrop (chart 3). In the US, signs of softer growth and inflation have caught the Fed’s eye, with several officials adopting a more dovish tone in recent days (chart 4). Yet structural risks continue to loom large. The sustained strength in gold and bitcoin reflects ongoing unease over inflation, financial stability, and broader geopolitical risk (chart 5). And the energy transition remains a critical faultline. Fossil fuels still dominate electricity generation, and while renewables are growing, they are arguably not scaling fast enough to meet rising demand or climate goals (chart 6). In short, climate risk and geopolitical instability continue to cast a long shadow over the outlook—well beyond the reach of monetary policy.
by:Andrew Cates
|in:Economy in Brief
USA| Jun 26 2025U.S. Q1 GDP Revised Weaker in Third Estimate
- The previously reported 0.2% q/q saar decline was revised to -0.5%.
- Consumer spending weakened markedly to a tepid 0.5% from 1.2% previously.
- Net exports were still the major drag while inventory investment still made a key contribution.
- GDP and PCE inflation were each revised up slightly.
by:Sandy Batten
|in:Economy in Brief
USA| Jun 26 2025U.S. Pending Home Sales Rise in May
- Rise recaptures part of earlier decline.
- Regional gains are widespread.
by:Tom Moeller
|in:Economy in Brief
USA| Jun 26 2025New Orders for Durable Goods: Firm Reading for May
- Fueled by robust orders for aircraft, but also respectable elsewhere.
- Demand for capital goods holding up well.
USA| Jun 26 2025U.S. Goods Trade Deficit Increases in May
- Deficit rise follows substantial narrowing.
- Sharp export decline reverses earlier increase.
- Imports are little changed following huge decline.
by:Tom Moeller
|in:Economy in Brief
- CFNAI -0.28 in May; -0.36 in April.
- Two of four CFNAI components up m/m, but three make negative contributions.
- Personal Consumption & Housing index falls to -0.12, a four-month low.
- CFNAI-MA3 drops to -0.16, the first negative figure since Jan.; still above -0.70 (recession signal).
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