German producer prices fell more than expected in July, marking their first decline in over two-and-a-half years, as easing energy prices raised hopes for a further decrease in inflation in Europe's largest economy.
The downturn in Germany's residential construction sector worsened in July, with a record number of companies reporting dwindling orders, as higher interest rates and rising construction costs hamper new business.
German business activity, particularly in the services sector, experienced its sharpest decline since May 2020, leading to concerns about the country's outlook for the remainder of the year and potential stagflation, as both manufacturing and services sectors are contracting.
Germany's business activity has seen a sharp decline, leading to concerns of a recession, as the country's Purchasing Managers' Index (PMI) dipped to its lowest level in over three years. This decline in activity is impacting the wider eurozone economy as well, with the region at risk of slipping into recession. This economic downturn is accompanied by a worrying uptick in inflation and slow growth, particularly in Germany.
Orders for long-lasting goods in the US rose in July for the third consecutive month, indicating a potential stabilization of the struggling industrial side of the economy, if the fluctuations caused by Boeing orders are excluded.
The mood among German businesses worsened in August, falling for the fourth consecutive month and raising concerns about a possible second recession; the Ifo business climate index dropped to 85.7, lower than expected, while the country's economy recorded zero growth in Q2.
German business morale deteriorated more than expected in August, falling for the fourth consecutive month as weak new orders and declining export expectations contribute to pessimism about the economy's recovery.
Profits at China's industrial firms fell 6.7% in July, marking the seventh consecutive month of decline, as weak demand continues to hinder the country's post-pandemic recovery.
German consumer sentiment is expected to decline in September due to decreasing income expectations and propensity to buy, hindering overall economic development and growth prospects in the country.
Japan's factory output fell more than expected in July, indicating a challenging start to the second half of the year for manufacturers amid concerns about China's growth and the global economy. Output declined 2.0% in July from the previous month, driven by decreased domestic and overseas orders, particularly in the electronic parts and production machinery sectors. However, car production rose 0.6% due to improved supply chain conditions.
German inflation fell slightly in August, but economists predict that the downward trend will continue in the coming months, with food prices showing above-average growth.
German exports fell 0.9% in July, less than expected, due to global demand weakness and supply-chain friction.
U.S. manufactured goods orders experienced a significant 2.1% decline in July, the first drop in four months, due in part to higher interest rates impacting business equipment spending.
European stock markets edged higher as investors digested positive French industrial production data, although major cash indices are on track to register losses for the week, and the pan-European benchmark index has experienced seven consecutive days of losses. French industrial production rebounded more than expected in July, while figures for Spain showed a smaller-than-expected decline. However, German industrial production fell more than expected in July, and economic growth in the eurozone for the second quarter was just 0.1%. Concerns about the strength of the Chinese and Japanese economies have also risen. The tech sector is under pressure due to Apple's difficulties in China, and oil prices have retreated but are still on course for gains this week.
Japan's core machinery orders fell more than expected in July, reflecting manufacturers' reluctance to invest due to sluggish global growth and weakness in China, signaling challenges for the country's economy.
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