Tag Archive for: Inflation

China’s Economic Outlook Clouded by Tariffs Despite Services Sector Resilience

By Bob Mason | Published August 5, 2025, 04:29 GMT

China’s economy stays on an unsure course as US tariffs press hard on its factory work, while the service work shows strength. Data from S&P Global connects each part with its own pace. The manufacturing side suffers under trade limits and local cost pressures, but the service side builds up hope with rising work and effort.

Services Sector Shows Strong Growth in July

S&P Global’s China General Services Purchasing Managers’ Index pushed up fast in July. The score grew from 50.6 in June to 52.6, marking the fastest jump in local demand over the past year. The report ties this jump to a faster rise in new work and a return of outside orders after three long months. More domestic trips and steady trade keep work moving forward.

Staff counts in the services area rose sharply. This gain comes after a drop in June. Output prices moved higher for the first time in six months. The change tells us that companies now share more trust in their plans. Jingyi Pan, Economist Associate Director at S&P Global Market Intelligence, said, "The services side did well in July. It stands out when the factory work slows down. The fresh rise in prices also shows that firms now have more trust."

Manufacturing Sector Declines Amid Tariff Pressures

In a different turn, the S&P Global China General Manufacturing PMI sank to 49.5 in July. This drop shows that factory work is shrinking. Domestic and overseas demand falls as makers feel higher cost strains and cut jobs. US tariffs, which now add 40% fees on goods passing by Southeast Asia to places such as Vietnam, hit the sector hard. These fees try to stop China from using indirect trade paths to skip direct duties.

Experts point to export work weakening further. The China Beige Book notes that new US rules on shipment origins aim to restrict these indirect moves soon. US tariffs match a 16.1% year-on-year fall in Chinese exports to the US in June. Exports to Southeast Asia grew by 16.8%, which helped with the gap. Through May, overall exports grew by 5.8% compared to last year, backing a 5.2% Q2 GDP rise.

Market and Investor Reactions

Mixed signs shift market mood. Soon after the services PMI report, the Hang Seng Index dropped. Later on, it settled at 24,760—a small gain of 0.11% on early August 5. Traders hope that a new US-China trade deal and fresh money measures from Beijing will spark change. Still, the index has not reached its July 24 high of 25,736. Ongoing trade strain and more tariff moves keep the path clouded.

The stock markets in Mainland China keep a firm hold as they work past the factory troubles and tariff concerns. Both the CSI 300 Index and the Shanghai Composite Index made small rises in early August after a strong July. Traders watch trade talks and Beijing’s promise of new help to boost local buying.

Outlook and Key Upcoming Events

As events progress, traders and experts will keep an eye on these points: the US-China trade data coming on August 7, advances in trade talks, and the size of next steps from Beijing. A move to ease trade rules, along with well-timed government help, may boost market trust and invite more stock buying in Hong Kong and Mainland China. If tariffs get tougher or the new help falls short, growth may slow and the mood among investors might drop.

For real-time updates on China’s trade rules and stock trends, stay tuned to FXEmpire’s economic calendar and market coverage.

About the Author
Bob Mason brings over 28 years of financial industry experience, covering currencies, commodities, alternative assets, and global equities, with a special focus on European and Asian markets. He has worked with multiple global rating agencies and multinational banks.


This article shows the economic and market facts as of early August 2025 and sticks to the data and expert views available at the time.

ISM Manufacturing PMI Drops to 48.0; S&P 500 Tests Session Lows Amid Mixed Economic Signals

August 1, 2025, 14:16 GMT – By Vladimir Zernov

The report on August 1, 2025 presents data where numbers point to slow factory work and a mixed mood in the market. The ISM reading falls below 50 as factory tasks slow. The S&P 500 shows early signs of weakness.

ISM Manufacturing PMI Shows Contraction

The ISM report places the Manufacturing PMI at 48.0 in July, down from 49.0 in June. The index now stays below 50; a number that marks slow activity. New orders edged up from 46.4 in June to 47.1 in July but stayed in the slow zone. Production moved from 50.3 to 51.4. This shift hints that output holds some strength amid the slow trend.

S&P Global Manufacturing PMI Aligns with ISM Data

The final S&P Global Manufacturing PMI dropped from 52.9 in June to 49.8 in July. The change sends the figure into a below-threshold range. It matched the forecast near 49.5. This match ties back to worries over the weak state of manufacturing.

Consumer Sentiment Shows Slight Improvement

The University of Michigan’s Consumer Sentiment index climbed from 60.7 in June to 61.7 in July. The rise nearly met the forecast of 62. The University still notes that the overall mood on spending remains low. Inflation views limp too. A year-ahead feeling slipped from 5.0% to 4.5%, while long-run views moved from 4.0% to 3.4%. This change may guide the next Fed steps.

Market Reactions: Dollar, Gold, and Equities

Market moves followed the report. The U.S. Dollar Index dropped close to session lows, dipping under the 98.90 mark as traders saw the weak manufacturing news. Gold prices rose near session highs toward $3,350 per ounce. A drop in Treasury yields helped push gold higher. In stocks, the S&P 500 fell near 6,220 after the data came out. Traders stayed alert after the weak ISM and the new jobs report. The Non-Farm Payrolls number remains a key signal today as investors look for hints on what the Fed might do next.

Looking Ahead

Observers watch upcoming figures and Fed notes for more clues about the U.S. economy. The drop in manufacturing numbers mixed with falling inflation views creates a scene where growth and price control face a tough task. For traders and investors, the news shows that keeping a close watch on key numbers helps when saving strategies for a shifting economy.


About the author: Vladimir Zernov is an independent trader with over 18 years of experience on stocks, futures, forex, indices, and commodities. He studies both near-term moves and longer trends in the market.

Related Articles:

  • U.S. Job Growth Misses Expectations as Revisions Signal Labor Market Weakness
  • China Manufacturing Sector Contracts in July as Tariffs Bite: Hang Seng and AUD/USD Dip
  • Apple Beats Q3 Estimates With Strongest Revenue Growth Since December 2021

For more detailed economic data and forecasts, visit the FX Empire economic calendar and markets section.

China’s Manufacturing Sector Contracts in July Amid Rising Tariff Pressures; Hang Seng Index and AUD/USD Experience Downward Pressure

By Bob Mason
Published: August 1, 2025, 02:27 GMT

China’s manufacturing shows a clear drop in July. Tariffs and weak demand affect production. The S&P Global China General Manufacturing PMI fell to 49.5 from 50.4 in June. The score sank below the neutral mark of 50 and missed the expected near-50 level. The drop puts extra strain on export-led companies and pushes down the Hang Seng Index and the value of the Australian dollar.

Key Highlights from July Manufacturing Data

  • Manufacturing PMI fell to 49.5, marking the first drop since late 2023.
  • New export orders shrank for the fourth month in a row, as US tariff risks add trade stress.
  • Both manufacturing output and new orders fell, with output decreasing for only the second time since October 2023.
  • Firms reduced jobs to manage costs in the face of weak demand.
  • Input costs climbed for the first time in five months when raw material prices rose.
  • Selling prices dropped even as input costs went up in a tough and competitive market.
  • Export charges went up as shipping and logistics costs increased.
  • Manufacturer mood improved a little but stayed below usual levels as they watched for better economic signs and government moves.

Expert Analysis on China’s Manufacturing Conditions

Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said, "Production slowed because new orders grew more slowly. Local business helped keep some orders, but weak overseas demand held back overall sales."

On pricing issues, Pan mentioned, "Firms lacked the strength to keep prices high as input costs went up."

Market Reactions: AUD/USD and Hang Seng Index Movement

After the PMI report came out, the Australian dollar fell slightly from $0.64297 to near $0.64249 before a small rise to $0.64261. China plays a big role for Australia, and weaker demand from China brings risks. This shift may affect future moves by Australia’s central bank.

RBA Governor Michele Bullock noted, "Trade with China remains important. If China helps its economy with fiscal actions, Australia may feel less of the tariff impact."

The Hang Seng Index first climbed 0.18% to 24,819 before the news. It then fell to 24,745 after the report. At the time of reporting, it had ticked up slightly to 24,751, but it stayed lower overall as investors showed caution.

Outlook: Stimulus Measures or Further Economic Challenges?

Global investors keep a sharp watch on China’s weak export demand and trade issues with the US. Beijing may try to fix the slump with stronger fiscal steps to boost home spending.

If Beijing uses strong fiscal help, the AUD/USD and Hang Seng Index might rise. A weak response may keep hurting China’s trade-based sectors and nearby markets.

For traders, it is important to track changes in China’s trade policy and new fiscal measures. They will also watch upcoming economic reports and global news that can affect trade and currency values.


Related Stories

  • Apple Beats Q3 Estimates With Strongest Revenue Growth Since December 2021
  • U.S. Personal Income and Spending Tick Higher in June, Keeping Pressure on Fed Outlook
  • Inflation Rises Sharply on PCE Data—Will Fed Hold Off on Rate Cuts?

About the Author
Bob Mason is a financial journalist with over 28 years of experience covering global markets, including currencies, commodities, and equities. He specializes in European and Asian economic developments.


This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult financial professionals before making investment decisions.

Apple Reports Strongest Quarterly Revenue Growth Since December 2021, Surpassing Expectations

Apple Inc. reported strong fiscal third-quarter earnings. These earnings passed market estimates and marked the highest revenue jump since December 2021. The stock climbed 3% after the report, driven by solid iPhone sales and growing demand in China.

Strong iPhone Sales and China Market Recovery Fuel Earnings Beat

Apple earned $1.57 per share on $94.04 billion in revenue. This beat analyst predictions of $1.43 per share and $89.53 billion in total revenue. The iPhone division helped most. It grew by 13% year-over-year to reach $44.58 billion, well above forecasts. CEO Tim Cook noted that the new iPhone 16 quickly gained buyers, as many users switched from older models.

Mac sales also rose nearly 15% to $8.05 billion. New MacBook Air models, released shortly before the quarter began, helped this growth. Apple’s Services group—which covers iCloud, AppleCare, and the App Store—grew by 13% to $27.42 billion. This rise came as subscriptions and App Store purchases grew in the double digits.

Challenges in iPad and Wearables Segments

Some areas did not do as well. The iPad division dropped 8% to $6.58 billion even after a new budget model arrived in March. The wearables group, which covers Apple Watch and AirPods, fell 8.6% to $7.4 billion. These results fell short of many estimates and show a slower demand for these products.

The gross margin reached 46.5%, a rise from the expected 45.9%. This boost came as Apple kept strong pricing power and worked efficiently, even when the company paid near $900 million in tariff costs during the quarter.

Growth in Greater China and a Focus on AI Technologies

Sales in Greater China grew by 4% to $15.37 billion. This rise reversed earlier drops in this important market. CEO Tim Cook mentioned that government aid for some devices played a role in this gain.

On the innovation side, Apple confirmed its plans with artificial intelligence. Cook called AI “one of the most profound technologies of our lifetime” and noted that Apple bought around seven small AI companies this year. The company will add AI skills across its platforms and products.

What Analysts and Traders Should Watch Going Forward

Market watchers should follow Apple’s work with AI and any new company deals that may speed up product updates. Continued iPhone upgrades and a strong Services group will be key to keep growth steady. On the other hand, tariff costs and lower sales in hardware like wearables and iPads stay a risk. Apple’s future comments on demand and results in China will get close attention in future reports.

Apple’s latest quarterly numbers send a clear sign of recovery and strength amid global economic challenges. This positions the company well as it moves into the rest of 2025. — Written by James Hyerczyk, Technical Analyst and Market Educator

U.S. inflation took a softer turn in May as the latest Consumer Price Index (CPI) data revealed only a modest 0.1% month-over-month increase—even below forecasts. This subdued inflation print, paired with weaker energy and select core goods prices, has bolstered expectations of a more dovish stance from the Federal Reserve. In this post, we dive into the key data points, examine the contributing factors, and explore what this means for the markets in the weeks ahead.

U.S. CPI: Slower Price Growth

Despite enduring trade tensions and tariffs, U.S. consumer inflation registered a mere 0.1% increase in May compared to the expected 0.2%. On an annual basis, inflation remains steady at 2.4%. This slight underperformance suggests that price pressures are easing, which could have significant implications for monetary policy.

US CPI Report
Figure: The CPI Rollercoaster – A visual representation of the moderated U.S. inflation trend.

Core CPI: Impact of Declining Vehicle and Apparel Prices

Core CPI, which excludes food and energy prices, also rose by only 0.1% in May—considerably lower than the anticipated 0.3% rise. A closer look at the numbers shows that prices in sectors particularly sensitive to tariffs, such as vehicles and apparel, actually declined. Used cars and trucks fell 0.5%, new vehicles slid 0.3%, and apparel dropped by 0.4%. These reductions helped to offset modest increases in other areas like medical care and shelter, ultimately keeping the overall core inflation figures subdued.

Energy Index: A Soft Landing for Gasoline and Natural Gas

Energy prices have been a significant drag on headline inflation. In May, the energy index dropped by 1.0%. Gasoline prices plunged by 2.6%, while natural gas prices went down by 1.0%. Over the past year, energy prices have declined by 3.5% overall—as gasoline prices have fallen sharply. Although electricity prices bucked the trend with a 0.9% increase in May and a 4.5% rise year-over-year, the overall softness in energy costs may help temper broader inflation expectations.

Food and Shelter: Mixed Signals in the CPI Basket

The food index experienced a 0.3% rise in May, recovering from a minor decline the previous month. Both grocery store and restaurant prices grew modestly, with full-service and limited-service meals moving in tandem. Meanwhile, shelter costs provided consistent upward pressure, rising 0.3% in May and 3.9% over the past year. While shelter holds a large share of the CPI basket, its gradual climb is being offset by the easing pressures seen in other areas.

Fed Outlook and Market Impact

The tepid core CPI report underlines the Federal Reserve’s cautious approach to changing interest rates. With tariffs not yet pushing prices upward significantly, Fed officials are likely to maintain a data-dependent and restrained policy stance. Market participants are now eyeing support for U.S. Treasuries, as softer inflation tends to drive yields lower. Meanwhile, the dollar is expected to remain range-bound in the near term, and equity markets could benefit from sustained consumer spending with limited cost pressures.

Conclusion

May’s inflation report paints a picture of moderated price pressures across several key sectors. With both headline and core CPI figures coming in below forecasts, concerns about runaway inflation appear to be easing. Although shelter prices continue their steady climb, declines in energy costs and sectors sensitive to tariffs provide room for a more dovish Fed stance. As the market processes these developments, traders can expect continued support for bonds and a stable outlook for the dollar in the coming months.

Tags: #Inflation #Fed #EconomicUpdate #CPI #EnergyPrices

Introduction: Navigating a Shock-Prone Global Economy

In a world increasingly defined by economic turbulence, Bank of Canada Governor Tiff Macklem is calling for an evolution in the central bank’s mandate. Speaking after maintaining interest rates for the second consecutive time, Macklem reflected on the challenges of steering Canada’s economy through what he describes as a “shock-prone” global landscape.

The timing of Macklem’s remarks couldn’t be more symbolic – delivered just hours before the Edmonton Oilers’ dramatic overtime victory in Game 1 of the Stanley Cup finals. Much like his hometown hockey team, Macklem knows something about facing long odds and adapting strategies mid-game.

The Challenge of Maintaining Economic Stability

From Pandemic Recovery to New Challenges

Macklem highlighted the Bank’s recent successes, noting: “We got inflation down. We didn’t cause a recession.” The Governor pointed to the Bank’s handling of post-pandemic inflation as evidence that its current framework works, but acknowledged new challenges have emerged.

“Until President Trump started threatening the economy with new tariffs,” Macklem noted, “we were actually seeing growth pick up.” This abrupt shift underscores the unpredictable nature of today’s economic environment.

Rethinking Traditional Approaches

The Bank of Canada is reconsidering some long-held assumptions:

  • Supply shocks are no longer automatically dismissed as temporary
  • Data collection methods are becoming more nimble and granular
  • Policy responses require a more “nuanced playbook”

Deputy Governor Sharon Kozicki recently explained how the Bank now relies more heavily on surveys and real-time data to complement traditional economic models.

Housing Affordability and the Inflation Target

One of the most pressing issues facing Canadian policymakers is housing affordability. Macklem acknowledged the dilemma:

“High interest rates make mortgages more expensive while low rates can push up the price of housing itself because they stoke demand.”

While maintaining that monetary policy alone can’t solve housing challenges, Macklem suggested the Bank’s mandate could expand to better address this concern when it’s reviewed next year.

 

Canada’s Role in Global Economic Cooperation

As chair of the G7 this year, Canada finds itself at the center of international economic discussions. Macklem described recent G7 Finance Ministers’ Summit conversations as “candid,” acknowledging that while consensus isn’t always possible, cooperation remains essential.

“International co-operation has never been easy,” Macklem stated. “It is particularly difficult right now, but that doesn’t make it less important. That makes it more important.”

Lessons from Recent Economic Battles

The Bank of Canada’s recent experience offers several key insights:

  1. Flexibility matters: The inflation targeting framework survived its toughest test in 30 years
  2. Communication is crucial: More Canadians now understand the Bank’s role and decisions
  3. Preparation is key: New types of data help respond faster to emerging challenges

Macklem emphasized that maintaining public confidence in price stability remains the Bank’s fundamental mission: “The economy does not work well when inflation is high. That’s all we can do for the Canadian economy. That’s what we can do for Canadians. And that’s what we’re focused on.”

Conclusion: Adapting to a New Economic Reality

As Canada’s economic team faces its latest challenge in the form of U.S. tariffs, Macklem’s message is clear: the rules of the game are changing. Just as the Oilers adapted their strategy between last year’s heartbreaking loss and this year’s finals, the Bank of Canada must evolve its approach to meet new economic realities.

With the mandate review coming next year, Canadians can expect serious discussion about how monetary policy should address not just inflation, but other pressing economic concerns like housing affordability. In this shock-prone world, flexibility and adaptability may become the most valuable tools in the central banker’s toolkit.

Tags: #BankOfCanada #EconomicPolicy #Inflation #HousingAffordability #CanadianEconomy

Global Markets in Flux: ECB Rate Cuts, US Labor Data, and Trade War Tensions Shape Economic Outlook

Global financial markets in motion
Caption: Financial markets face pressure from mixed economic signals and geopolitical tensions.

ECB Maintains Cautious Stance Despite Rate Cut

The European Central Bank’s recent rate cut decision has failed to provide sustained relief for the Euro, as President Christine Lagarde maintained a cautious tone. The EUR/USD pair continues to face pressure amid growing trade risks and uncertainty about future policy moves.

Market analysts note that while the rate cut was widely anticipated, Lagarde’s reluctance to commit to further easing has left traders uncertain about the ECB’s path forward. This comes as:

  • Trade tensions between the US and China escalate
  • Global manufacturing data shows mixed results
  • Currency markets remain volatile

US Economic Indicators Paint Mixed Picture

Labor Market Shows Signs of Cooling

Recent US employment data reveals a softening labor market, with jobless claims rising to 247,000. The ADP report showed a sharp slowdown in job growth to just 37,000 in May, while JOLTs job openings unexpectedly rose to 7.391 million.

US employment trends chart
Caption: Diverging labor market indicators create uncertainty about the health of the US economy.

Consumer and Manufacturing Data Diverges

The ISM Services PMI dropped below the expansion threshold to 49.9, while CB Consumer Confidence jumped to 98.0. Meanwhile, durable goods orders slid 6.3% after four months of gains, with transportation orders down 17%.

China’s Economic Crosscurrents

China’s economic data reveals stark contrasts between sectors:

  • Services PMI shows expansion
  • Manufacturing PMI slumps amid trade war concerns
  • Job market weakness persists

President Xi faces difficult decisions about stimulus measures as the trade war with the US threatens China’s economic recovery. Recent court rulings blocking some Trump-era tariffs add another layer of complexity to US-China trade relations.

China factory activity
Caption: China’s manufacturing sector struggles while services show resilience.

Global Developments Impacting Markets

European Economies at Crossroads

  • Bulgaria progresses toward euro adoption
  • Portugal faces political fragmentation challenges
  • UK retail sales surprise complicates BoE rate cut timing

US Monetary Policy Outlook

The FOMC minutes confirmed the Fed’s patient stance on rate cuts, while April’s PCE inflation falling to 2.1% boosted expectations for steady rates in the near term. Michigan Consumer Sentiment remained unchanged at 52.2.

Commodities and Equities React

Energy markets saw an EIA natural gas storage build of +101 Bcf, exceeding estimates. Meanwhile, equity markets showed resilience:

  • Nasdaq 100 gained despite export restrictions on Nvidia
  • S&P 500 rebounded above 5900
  • Salesforce boosted revenue outlook

Conclusion: Navigating Uncertain Markets

The current economic landscape presents investors with numerous crosscurrents – from the ECB’s cautious easing to mixed US labor data and ongoing US-China trade tensions. While some sectors show resilience (services, consumer confidence), others face clear headwinds (manufacturing, durable goods).

Market participants should prepare for continued volatility as central banks navigate inflation concerns, geopolitical risks persist, and economic indicators send conflicting signals. The coming weeks will be crucial for determining whether current trends represent temporary fluctuations or more fundamental shifts in the global economy.

Introduction

The Great Depression of the 1930s was a defining economic crisis that reshaped societies and taught valuable lessons about financial resilience. Today, with global economies facing challenges like inflation, market volatility, and geopolitical tensions, those lessons remain relevant. This blog examines the economic and human impacts of the Great Depression, drawing parallels to modern financial challenges, and offers practical strategies to build resilience in today’s economy. By understanding history, we can better prepare for an uncertain future.

Economic Impact of the Great Depression

The Great Depression began with the stock market crash of 1929, leading to a devastating economic downturn. Between 1929 and 1933, the U.S. GDP fell by nearly 30%, and unemployment soared to 25%. Banks failed en masse—over 9,000 banks collapsed, wiping out savings for millions. Global trade plummeted as countries turned to protectionist policies, exacerbating the crisis. Prices for goods, especially agricultural products, dropped sharply, leaving farmers unable to repay debts or sustain their livelihoods. This period of economic hardship highlighted the dangers of speculative investing, lack of regulation, and overreliance on credit, issues that resonate with today’s concerns about market bubbles and financial instability.

Human Impact of the Great Depression

The human toll was immense. Families lost homes, leading to widespread homelessness and the creation of “Hoovervilles”—shantytowns named after President Herbert Hoover, who was blamed for the crisis. Hunger became a daily reality, with breadlines and soup kitchens struggling to meet demand. The psychological impact was profound, as people grappled with despair and loss of dignity. Education suffered as c

hildren left school to work, and healthcare access declined, leading to worsened public health. These hardships underscored the importance of social safety nets, a lesson that led to the creation of programs like Social Security in the U.S., which remain critical today.

2025 06 04 08 41 40 6898

Parallels to Today’s Economy

While today’s economy differs, there are striking similarities to the 1930s. Inflation, as seen in recent years, erodes purchasing power, much like the deflation of the Great Depression hurt consumers and businesses. Market volatility, driven by speculative investments in tech stocks or cryptocurrencies, mirrors the 1929 stock market bubble. Rising debt levels among households and governments echo the over-leveraging of the pre-Depression era. Additionally, global trade tensions and supply chain disruptions, such as those caused by recent geopolitical conflicts, resemble the protectionism of the 1930s. Understanding these parallels can help us avoid past mistakes and build a more resilient financial future.

Practical Tips for Building Resilience

Learning from the Great Depression, here are actionable steps to safeguard your finances in today’s economy:

  • Maintain an Emergency Fund: Aim to save 6-12 months of living expenses to weather job loss or economic downturns, a lesson from the bank failures of the 1930s.
  • Diversify Income Sources: Relying on a single income stream is risky. Explore side hustles, freelancing, or passive income like rental properties to create financial stability.
  • Avoid Over-Leveraging: Limit debt, especially high-interest consumer debt, to avoid the debt traps that devastated families during the Depression.
  • Invest Conservatively: Focus on diversified, low-risk investments like index funds rather than speculative assets, reducing exposure to market crashes.
  • Stay Informed: Monitor economic indicators like inflation rates and unemployment trends to make informed financial decisions, a practice that could have mitigated losses in the 1930s.

Conclusion

The Great Depression offers timeless lessons for navigating today’s economic challenges. By understanding its causes and impacts, we can take proactive steps to protect our finances and build resilience. To dive deeper into strategies for economic preparedness, watch our videos at The Money Grower.