TechFlow News, May 5: Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated, “U.S. business activity has resumed growth after a slight decline in March; however, it is clear that growth momentum has significantly slowed since the beginning of the year. Survey data indicate an annualized GDP growth rate of approximately a modest 1%. Growth may weaken further, as the services sector reported a decline in new business inflows for the first time in two years—reflecting an intensifying demand impact from the Middle East conflict.
The direct impact of the war is most evident in the services sector: elevated prices have led to a pullback in discretionary spending (e.g., vacations and entertainment), while high fuel costs and travel disruptions have dampened transportation activity.
Meanwhile, declining demand for financial services—partly attributable to rising uncertainty about market prospects—also reflects market expectations of higher inflation and interest rates impacting real estate and credit activity. Input-cost inflation has risen further, fuel prices have increased, and prices for both goods and services are broadly higher, alongside rising wages. These factors will feed into consumer inflation over the coming months.” (Jinshi)
