Latest news with #servicesSector
Yahoo
04-07-2025
- Business
- Yahoo
Canadian dollar pares weekly gain as downturn deepens in services economy
TORONTO (Reuters) -The Canadian dollar weakened against its U.S. counterpart on Friday as the recent uptick in risk appetite lost momentum and after the release of downbeat data for Canada's services sector, but the currency was still headed for a weekly gain. The loonie was trading 0.2% lower at 1.3605 per U.S. dollar, or 73.50 U.S. cents, after moving in a range of 1.3567 to 1.3612. For the week, the currency was on track to advance 0.6%. "A spike in risk aversion in thin, late week trading has chipped away at the CAD's rise (this week) a little but markets remain keen to pick up CAD on minor dips," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note. "This is a view we endorse." A weak trend for the U.S. dollar, positive risk sentiment and higher metal prices have contributed to an improvement in the estimated fair value of the Canadian dollar over the past month, the strategists said. Canada is a major producer of copper as well as other commodities, such as oil. With the U.S. markets closed for Independence Day, attention has turned to U.S. President Donald Trump's July 9 deadline for sweeping tariffs take to effect on countries that have not yet secured trade agreements with the United States. Canadian Prime Minister Mark Carney and Trump have agreed to reach some form of a trade deal by July 21. Canada's services economy contracted at a steeper pace in June as uncertainty generated by U.S. trade policy depressed activity and cost pressures increased, S&P Global's Canada services PMI data showed. The headline Business Activity Index fell to 44.3 last month from 45.6 in May. The price of oil fell 1% to $66.33 a barrel on expectations that OPEC+ producers will decide this weekend to raise output, while the Canadian 10-year yield was down 3.3 basis points at 3.361%, after earlier touching its highest level since June 16 at 3.402%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
03-07-2025
- Business
- Reuters
US services sector rebounds but employment contracts again
WASHINGTON, July 3 (Reuters) - U.S. services sector activity picked up in June as orders rebounded, but employment contracted for the third time this year, underscoring the impact of policy uncertainty on businesses. The Institute for Supply Management (ISM) said on Thursday that its nonmanufacturing purchasing managers index (PMI) increased to 50.8 last month from 49.9 in May. Economists polled by Reuters had forecast the services PMI rising to 50.5. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. Economists say businesses are in limbo over the uncertainty about what happens after President Donald Trump's 90-day pause on higher reciprocal tariffs expires next week. A 90-day temporary reduction in duties between the U.S. and China is due to lapse in mid-August. The ISM survey's new orders measure rebounded to 51.3 last month from 46.4 in May. The improvement in demand, however, failed to boost employment. The survey's measure of services employment fell to 47.2 from 50.7 in May. It has contracted in three of the last six months. That is consistent with other data that have suggested a loss of labor market momentum amid a hesitancy by businesses to step up hiring. The ISM has noted that "higher scrutiny is being placed on all jobs that need to be filled, whether it be a new position or backfill for an existing role." Businesses, however, continue to hoard workers after experiencing difficulties finding labor during and after the COVID-19 pandemic. That is keeping the labor market humming and the overall economy out of recession. But a period of sluggish growth and high inflation, commonly known as stagflation, remains a risk for the economy. The survey's measure of prices paid for services inputs eased to a still-high 67.5 from 68.7 in May, which was the highest level since November 2022. Economists expect the tariff boost to inflation to start showing in summer. Inflation has largely remained moderate because businesses have been selling merchandise accumulated before import duties came into effect, they said. But some believe competition amid softening demand could blunt some of the anticipated price hikes from tariffs. Economists expect the Federal Reserve to resume cutting interest rates in September. The U.S. central bank last month left its benchmark overnight interest rate in the 4.25%-4.50% range where it has been since December. Fed Chair Jerome Powell on Tuesday reiterated the central bank's plans to "wait and learn more" about the impact of tariffs on inflation before lowering rates again.
Irish Times
05-06-2025
- Business
- Irish Times
Growth in Irish services sector rebounds slightly against euro zone decline
The rate of growth in Ireland's services sector has rebounded slightly from April's lows but remains below the long-term average, the latest AIB purchasing managers index (PMI) has revealed. Optimism levels in the sector barely recovered from last month's post-pandemic low, with firms pointing to ongoing economic uncertainty caused by trade war fears. The seasonally adjusted AIB Ireland services business activity index rose to 54.7 from 52.8 in April. 'The uptick was driven by stronger new business growth and a recovery in output expectations, albeit outstanding business and employment growth both eased,' AIB chief economist David McNamara said. READ MORE This rate of growth is well ahead of the euro zone, which at 48.9 experienced a slight decline in business activity, as well as the UK and US, which both saw mild growth in the sector at 50.2 and 52.3 respectively. The index ranges from 0 to 100, with a figure above 50 showing growth. The transport, tourism and leisure industry was a drag on the overall sectoral index, registered a third successive monthly decline in activity at 47.0, the fastest rate of decline since October 2023. However, growth in the remaining subsectors outweighed that decline. The technology, media and telecoms sector recorded the fastest expansion of business activity in May at 59.1, followed by business services (56.0) and financial services (54.2). This trend was largely matched in the employment indicators, the transport, tourism and leisure sector posted a decline in staffing for the first time in 2025, while the financial services area reported mild growth. 'On the inflation front, input cost pressures eased further to the slowest rate since last September,' AIB's chief economist noted, 'but prices charged picked up and remain well above the long-term average'. Companies reported labour costs as the primary inflationary pressure, alongside insurance and fuel costs. While companies reported a higher level of input price inflation, the prices charged to customers saw a lesser rate. Despite this, the sector has seen consecutive price increases every month since March 2021. The rate of new business growth improved in May, following a drop in April, but the new business index remains below its long-run average. Contributing to that regrowth was new work from international clients which rose slightly in the month. Optimism levels in the sector recovered minimally after a stark decrease in April. While firms highlighted trade disruptions as cause for concern, the 12-month outlook was kept positive overall by confidence from investment, new services, AI innovation, larger sales teams and tourism. This sense was strongest in the financial services subsector and weakest in business services
Daily Mail
04-06-2025
- Business
- Daily Mail
Services sector returns to growth in major boost to UK economy
Britain's services sector returned to tepid growth last month after jitters about Donald Trump's tariffs caused the sector to shrink in April for the first time in a year and a half. The closely-watched S&P Global Purchasing Managers' Index for Britain's services sector increased to 50.9 in May from 49.0 in April, and above an earlier flash estimate of 50.2. The upward revision also lifted the composite PMI, which includes the smaller manufacturing sector, taking it above the 50 mark which divides growth from contraction. Tim Moore, S&P's global economics director, said: 'Receding concerns about US tariffs, recovering global financial markets and greater confidence among clients all helped to support output growth.' April's sharp drop in export orders substantially reversed itself while overall new orders also fell at a slower rate than the month before, helping lift expectations for future output to their highest since October. Britain's economy grew by a stronger-than-expected 0.7 per cent in the first quarter of this year but the Bank of England said on Tuesday that it expected growth to slow, partly due to the downbeat message from a range of business surveys. Uptick: Britain's services sector returned to tepid growth last month, data shows Thomas Pugh, economist at RSM, UK said the combination of a rolling back of some US tariffs, a recovery in financial markets and stronger PMIs #suggests the economy began to recover in May'. He added: 'The positive news was that business sentiment across the economy seems to have rebounded. 'What's more, the input and output cost balances both dropped sharply, suggesting that the jump in employment costs in April aren't continuing to put upward pressure on prices.' But Pugh cautioned that growth is 'likely to be bumpy this year' with Britain facing tariffs, uncertainty and taxes that it didn't have in the first quarter, which 'probably marked the highpoint for the year'. The latest PMI figures showed continued pressure on businesses from labour costs, reflecting a near 7 per cent increase in the minimum wage and an increase in employers' national insurance contributions. Both increases, which are the result of last year's budget, most affect firms employing large numbers of lower-paid or part-time staff. Businesses have cut staff numbers in each of the past eight months - largely by not replacing staff who left - although May's pace of decline was the smallest in six months. Firms' costs rose less than in April but still at a rapid pace, which they again largely attributed to higher labour costs, while prices charged rose at the slowest rate in seven months due to increased competitive pressures. That is likely to reassure the Bank of England, which is concerned that rapid wage growth will make it hard to get inflation back to its 2 per cent target. S&P's Moore said: 'The service sector regained its poise in May as receding concerns about US tariffs, recovering global financial markets and greater confidence among clients all helped to support output growth. 'Although only marginal, the upturn in service sector activity was stronger than first estimated in May. 'Output growth expectations for the year ahead also rebounded after April's tariff-related slump. 'Optimism reached its highest level since October 2024, which reflected forthcoming business investment plans alongside hopes of a turnaround in sales pipelines and improving domestic economic prospects.' He added: 'While rising wages were again the most commonly reported factor pushing up input prices, the overall rate of cost inflation eased from April's 21-month high. 'Softer cost inflation and intense competitive pressures contributed to the slowest rise in price charged by service providers since last October.' On Tuesday, Bank of England governor Andrew Bailey suggested dreary business surveys indicated the economy looked set to weaken. In an appearance in front of the Treasury Select Committee, Bailey said: 'We have had more volatile short run GDP numbers of late. 'The challenge we have at the moment is that the forward-looking sort of evidence on activity in the economy – so the surveys – are nothing like as strong as that.' The governor described a 'disjoint' between official growth data and forward-looking expectations.
Bloomberg
03-06-2025
- Business
- Bloomberg
Euro-Zone Inflation Slows Below 2%, Backing More ECB Rate Cuts
Euro-area inflation eased more than expected, dipping below the European Central Bank's 2% target and supporting the case for interest rates to be lowered further. Consumer prices rose 1.9% from a year ago in May, down from 2.2% in April and below the 2% median estimate in a Bloomberg survey of economists, data Tuesday showed. A core gauge excluding volatile items like food and energy moderated to 2.3%, while pressures in the closely watched services sector cooled markedly.
