Oil prices plunged on Thursday. Reuters reports:
Oil tumbled 6 percent on Thursday to a four-month low after the world's top consumers released emergency oil reserves for the third time ever, a surprise intervention to aid the struggling global economy.
The International Energy Agency announced it would inject 60 million barrels of government-held stocks in the global market, immediately increasing world supply by some 2.5 percent for the next month and sending prices spiraling, with U.S. crude prices erasing all of the year's gains.
The fall in oil prices should help boost a global economy that showed further signs of weakness on Thursday.
In China, manufacturing barely grew in June, according to a Bloomberg report.
China’s manufacturing may expand at the slowest pace in 11 months in June, as output growth stalls and export orders drop, a preliminary purchasing managers’ index showed.
The 50.1 level reported by HSBC Holdings Plc. and Markit Economics today compares with a final reading of 51.6 in May. A number above 50 indicates expansion.
The eurozone economy also showed a significant slowdown in June. From Bloomberg:
European services and manufacturing growth slowed more than economists forecast in June, adding to signs that the economy is losing some momentum.
A composite index based on a survey of euro-area purchasing managers in both industries fell to 53.6 from 55.8 in May, London-based Markit Economics said today. Economists had forecast a drop to 55.2, the median of 16 estimates in a Bloomberg survey showed. A reading above 50 indicates growth. Output growth weakened to the slowest in almost two years...
The euro-area services indicator fell to 54.2 this month from 56 in May, Markit said in the initial estimate. That’s the weakest in six months. The manufacturing gauge decreased to 52 from 54.6 in the previous month, the lowest in 18 months.
In the UK, retail sales turned sharply down in June. Reuters reports:
Retail sales showed their weakest performance for a year this month, and stores' outlook for the coming months is little better, a survey by the CBI employers' organisation showed on Wednesday.
The CBI distributive trades survey's June sales balance fell to a 12-month low of -2, well below both May's reading of +18 and economists' forecasts for a fall to +10.
The US provided no exception to the pattern seen in the rest of the world. From Reuters:
The number of Americans filing new claims for unemployment benefits rose last week, suggesting little improvement in the labor market this month after hiring stumbled badly in May.
Initial claims for state unemployment benefits climbed by 9,000 to 429,000, the Labor Department said on Thursday. Economists had expected claims to come in at 415,000...
A separate report on Thursday highlighted one of the economy's weakest spots: housing. The Commerce Department said new single-family home sales fell 2.1 percent to an annual rate of 319,000 units in May. A report on Tuesday had shown sales of previously owned homes, a larger segment of the market, fell 3.8 percent to a six-month low...
Separately, the Chicago Federal Reserve's national activity index stayed in negative territory for a second straight month in May, indicating the economy continues to grow below trend.
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