Business activity inches forward

U.S. business activity expanded in early June at the slowest pace in three months, held back by a deeper contraction at factories.

The S&P Global flash June composite purchasing managers index fell 1.3 points to 53, the group reported Friday. Readings above 50 indicate growth.

The report offered mixed news on inflation.

A gauge of factory input prices shrank the most in over three years while a measure for service providers climbed to a five-month high.

However, the composite measure of prices received dropped to the lowest since 2020.

The group’s overall services gauge remained elevated on robust demand, which helped drive a measure of expectations to a more than one-year high.

Yellen downplays recession risk

Treasury Secretary Janet Yellen sees diminishing risk for the U.S. to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.

On the chance of a recession, Yellen said “my odds of it, if anything, have gone down – because look at the resilience of the labor market, and inflation is coming down.”

“I’m not going to say it’s not a risk, because the Fed is tightening policy,” she said, alluding to the Federal Reserve’s 10 interest-rate hikes since March 2022, with potentially more to come.

Her remarks contrasted with rising recession concerns across the Atlantic.

Economic activity almost stalled in the euro area, based on data compiled by S&P Global published Friday.

From wire reports