In May, the PMI of manufacturing industry in the US hit a new 10-year low

According to the latest data released by IHS Markit, a well-known US Economic Research company, PMI in manufacturing and service industries in the United States fell sharply short of expectations in May. Among them, the PMI of service industry in the United States dropped to 50.9% in May, which was significantly lower than the market expectation of 53.5%, a new low since February 2016. PMI in manufacturing fell to 50.9% in May, the lowest level since September 2009 or 116 months. In addition, the new order index has fallen for the first time since August 2009. When the bleak news of PMI came out, US stocks shook immediately. Daily Economic News reporters observed that major U.S. stock indexes opened higher and lower on Friday. For example, the S& P 500 index opened 0.46% higher and closed 0.14%, while the Na Index rose 0.62% and 0.11%. The PMI data significantly underestimated the market's anxiety about the U.S. economic outlook. Meanwhile, the 10-year Treasury yield hit 2.329%, the lowest since December 2017. The upside-down of the yield curve of long and short bonds is becoming more and more obvious, suggesting that the risk of economic recession in the United States is increasing.

"Investors will be worried if only US economic data are weak, but with trade tensions, investors need to be alert to further slowdown in the next three to six months." Kathy Lien, executive director of foreign exchange strategy at BK Asset Management, said earlier.

For a long time, the slowdown in the U.S. economy has been led by manufacturing industry, but the current slowdown is spreading to the service industry.

"The performance of services is a key indicator of the health of domestic demand in the United States, so the spread of this slowdown poses a downside risk to the economic outlook." Chris Williamson, chief business economist at IHSMarkit, said: "Worries about trade tensions and increased uncertainty further undermined order growth and business confidence, with business activity slowing sharply in May. The growth rate of the new business index is the smallest since the financial crisis, and the situation may be worse in the future. Journalists learned that the employment growth rate in the United States in May was the lowest in two years. According to a study by the Global Trade Partnership, a US business advisory body, a 25% tariff on $250 billion worth of Chinese imports to the United States and a tariff on imports of steel and aluminium products will result in 934,000 job losses in the United States each year.

Williamson said: "The worsening industry dilemma in May means that manufacturing may cause a greater drag on the U.S. economy in the second quarter."

Key developments in the US market this week:

Monday: The US and Japan plan to hold a summit meeting in Tokyo on the 27th and consider holding ministerial trade negotiations before that.

Wednesday: The Richmond Federal Reserve Manufacturing Index was released in May.

Friday: The final value of the University of Michigan Consumer Confidence Index was released in May.