PMI plummeted and employment "exploded", Goldman Sachs Moody's collective voice, the US economy is approaching recession

XM Foreign Exchange APP News-On Wednesday (August 6) Asian period, the US dollar index maintained a weak volatile pattern, and now trading around 98.73, a slight decline of 0.02% from the previous trading day. Despite the sharp rise last week for six consecutive trading days, market sentiment reversed at the beginning of this week, with the core contradictions focusing on the weak performance of US economic data. The US July ISM non-manufacturing PMI released on Tuesday (August 5) plummeted to 50.1 from 50.8 in June, not only lower than the expected 51.5, but also approached the critical point of the boom-bust line, setting the third lowest reading since the epidemic in 2020. Sub-item data shows that the employment index fell to a five-month low of 46.4, and the input cost index climbed to a new high since October 2022, highlighting the dilemma of the decay of the expansion momentum of the service industry and the coexistence of inflationary pressure. This resonates with the non-farm employment data released on August 1. The non-agricultural data was lower than expected overall, with only 73,000 new jobs added that month, and the total employment growth data for May and June was lowered by 258,000, causing the US dollar to plummet by 1.06% on the same day. Morgan Stanley analysis pointed out that in addition to the revisions during the pandemic, this is the largest two-month jobs downgrade in nearly 46 years. "The foundation of the U.S. economy is more unstable than originally thought - although most forecasters still expect a soft landing in 2025, the possibility of a recession may be higher." Moody's chief economist Mark Zandi claimed that "the economy is on the brink of recession. This is the clear conclusion of last week's economic data. Kevin Gordon, senior investment strategist at Schwab Finance, said last Friday (August 1), "There is a clear narrative shift in the economist vifu.netmunity, as employment data were revised severely in May and June. As always, don't overdo itFocus or infer a single report; but if we continue to see a sharp slowdown in employment growth and rising unemployment rates – consistent with the May-July trend – this will indicate ahead of schedule recession conditions are forming rapidly. "Goldman Sachs economists believe that "the U.S. job market is now approaching a 'stall speed' - that is, the labor market is beginning to weaken in a 'self-reinforcement' way. "At the same time, Goldman Sachs believes that "its estimates of potential employment growth have 'pivoted' due to the downward revision of employment data, which is vifu.netparable to the other two-month job revisions related to the recession in the past. Economists are now focusing on several key indicators in the vifu.neting months, which could be early warning signs of an upcoming recession. " (The wage growth cut in May and June is consistent with similar revisions in past recessions) Charles Schwab's Gordon reiterated that "future employment reports are crucial." The job market has now become the focus of attention. Any further signs of weakness could strongly indicate that the economy is turning to a recession. "Wall Street is also highly alert to whether Americans are controlling their consumption. Michael Brown (a senior research strategist at Pepperstone) said that given the weak labor market could cut consumer spending in the vifu.neting months, the view of a solid U.S. economic foundation is beginning to appear "quite dangerous." Americans have begun to tighten their wallets. Despite overall increase in consumer spending in June, personal consumption spending for durable goods, a measure of Americans spending on goods, fell to $2.24 trillion in June, down about $40 billion from their April peak, according to the Bureau of Economic Analysis. . According to Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, Americans are starting to reduce their service spending. “Service spending has slowed significantly, and last year was still good, with a significant deterioration in the labor market and a drag on real income from tariffs suggesting that a significant recovery is unlikely,” Allen wrote in a note, though he added that he believes that spending “stagnation” in spending is more likely than a “collapse” in spending in the vifu.neting months. Moody’s Zandi wrote on X, “Consumer spending is stagnant, construction and manufacturing are shrinking, and employment will also decline. And as inflation rises, it's hard for the Fed to help. "Technical,

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