The Day at a Glance | May 3 2022

The Top

*The US manufacturing ISM points towards a stronger than expected slowdown in the sector during April (55.4 vs 57.6e.).

*IMEF indicators confirmed that Mexico´s economy maintained its rate of growth in April.

*Biden administration is considering decreasing Trump era tariffs on Chinese products in order to lighten inflationary pressures.

*Germany backs potential Swedish and Finnish NATO membership bids.

*Inflation for producers in Europe confirmed a 36.8% annual increase in March.

*Russia avoids default after dollar payment maturities this week.

Economic environment

US manufacturing sector slowing down. Leading economic activity indicators from the Institute for Supply Management (ISM) in the United States confirmed a considerable slowdown in manufacturing activities during April. The indicator set at its lowest levels in the last 20 months (55.4 Apr. vs 57.1 Mar.). The survey revealed that there are still persistent problems among production chains and a scarcity of workers that limit production capacity among businesses, two factors that worsened during the month. Additionally, there are some signs that demand has started to weaken as consumption habits steer towards services. Despite this, prices continue to increase at a historically fast pace, according to the price sub-index (84.6 Apr. vs 87.1 Mar.). The data suggests that the manufacturing sector has started growing at a more moderate pace as the Federal Reserve plans to carry out more aggressive interest rate increases in order to contain inflation. The slowdown and the adjustment in financial conditions could contribute to slower growth in the United States in the second half of 2022. At the moment, this has not affected Mexico´s economy, which recorded growth in both the manufacturing (52.5) and the services (53) sectors in April, according to the IMEF.