Consumer credit increased at a slower pace in June, as consumers increased their debt by $17.3 billion, marking the seventh consecutive month of credit growth over 6%. June’s gain was led by an 8.4% rise in non-revolving debt.
Source: St. Louis Federal Reserve
On the upside, the US trade deficit shrank 7% in June to $41.5 billion, the steepest decline since last November. While exports edged up slightly, imports fell 1.2% – the biggest drop in a year, with imports of petroleum falling to the lowest level since 2010.
Factory orders rose 1.1% in June, led by an 8.4% rise in demand for commercial aircraft and a 2.9% increase in machinery orders.
Activity in the service sector rose to an 8 and ½ year high last month, as the ISM non-manufacturing index rose to a reading of 58.7 – the highest since December 2005.
In other news, China’s trade surplus rose to a record $47.3 billion in July, as exports increased 14.5% on a yearly basis, while imports fell 1.6%. The previous monthly record was $40.1 billion set back in November 2008. China’s exports to the EU surged 17% from a year earlier, and shipments to the US rose 12.3% – the biggest gain since last November. The data comes after a recent release showing that Chinese manufacturing rose in July at the fastest pace in more than two years.
Facing the Ukraine crisis as well as a relapsing Italian economy, the European Central Bank held interest rates at record lows at this week’s Governing Council meeting. ECB President Mario Draghi cautioned that the impact of the Ukraine crisis is “hard to assess”, and that the risks to the Eurozone’s recovery “are to the downside and certainly one of these risks is geopolitical developments”.