The latest data indicates significant stress in China's service sector, with activity growth declining to a seven-month low due to poor business confidence and the ongoing US-China trade tensions. The Caixin China General Services Business Activity Index fell to 50.7, indicating a slowdown in new business and staffing cuts. In contrast, the US services sector showed growth in April, but rising costs from tariffs are contributing to inflation concerns. Investors are hopeful for advancements in trade negotiations, as Treasury Secretary Scott Bessent suggested potential deals are on the horizon.
The latest purchasing manager's survey data has shown that China's service sector activity growth has hit a seven-month low, signaling concerns about the impact of the US-China trade war.
Disruptions to goods trade amid fresh tariffs had negatively impacted some service providers in April, according to anecdotal evidence, leading to the slowest rise in overall new work for 28 months.
The financial markets are looking for progress in trade talks between the US and its trading partners, with treasury secretary Scott Bessent indicating they are very close to some deals.
The US services sector's growth picked up in April, but the prices paid by American firms for materials and services jumped, suggesting that tariffs are fueling inflation.
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