Daily Economic Briefing: DM Flash PMIs Bend Under Energy Shock

Developed Market flash PMIs fell to 50.3 in May, signaling a stall in economic activity as an energy shock weighs heavily on the service sector and business sentiment. While manufacturing remains more resilient, the risk of a labor market downturn has increased, prompting a downgrade to Euro area GDP forecasts.

Key Takeaways

• 1.The May flash composite PMI for Developed Markets fell 0.8pt to 50.3, indicating near-stagnation driven primarily by a deterioration in the services sector due to high energy costs.
• 2.J.P. Morgan lowered its Euro area 2Q GDP forecast to 0.25%ar following weak survey data, though an ECB rate hike is still expected in June.
• 3.The manufacturing sector shows resilience compared to services, supported by 'front-loading' activity despite a sharp drop in regional surveys like the Philadelphia Fed manufacturing index.

Table of Contents

• Daily Economic Briefing
• US manufacturing surveys
• Focus: Flash PMIs show signs of strain
• J.P. Morgan PMI, Developed Markets
• J.P. Morgan services PMI, Developed Markets
• J.P. Morgan manufacturing PMI, Developed Markets
• Quantitative Economic Dashboard (QED): Summary
• US activity tracker
• Inflation tracking
• Policy rate tracking
• Other Disclosures
• Legal Entities Disclosures and Country-/Region-Specific Disclosures

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