Service Sector Weakness and Treasury Demand Signal Lingering Clouds

An Economic Commentary by Patrick T. Bulger | The Distilled Perspective

This week’s economic data confirms deteriorating conditions we have been highlighting in prior posts. 

The July service sector report showed a broad-based deceleration, 
with Business Activity, Employment, and New Orders all coming in below their June numbers. 

This weakness was also accompanied by further indications of increased pricing, a concerning combination of slowing growth and persistent inflationary pressures.

Additionally, Treasury auctions saw yields maintain their drop from last week. 
This indicates sustained demand for safe assets, 
a clear signal of market participants moving capital toward perceived secure positions. 

The convergence of these two key indicators suggests that the clouds of economic uncertainty from last week still loom.

We will continue to keep a close eye on the incoming information as it becomes available.

Key Takeaways,
Macro-Economic data suggests that activity is weak, caution is warranted, while some markets ignore.  
This reminds me of year 2000, 2007, and 2020.  
Everyone’s an Expert, Till Proven Not…Hence, Proof-By-Loss, which is not prudent management.

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