Charting the Global Economy: Sentiment among US consumers wanes

Sentiment among US consumers deteriorated for a third straight month on cost-of-living concerns, while personal spending in Japan continued to weaken and German factory orders slid.

Meanwhile, yields on French bonds have jumped on a lack of meaningful progress toward reducing the budget deficit and the nation’s debt. Investors are also demanding a premium ahead of next year’s presidential election.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:


US

Consumer sentiment fell in early October and views of current economic conditions tumbled to a record low as inflation weighed on households. Views of buying conditions for durable goods fell to a record low due to concerns over higher prices and interest rates.

The US service sector expanded at a slower pace in September as cost pressures grew by the most in more than four years. The Institute for Supply Management’s services index fell 0.5 point to 54.9 last month. While resilient consumer spending, a stable job market and strong business investment continue to support demand for services, firms must also contend with mounting costs.

Mortgage rates climbed for a seventh straight week to their highest level in nearly three years, compounding the nation’s affordability problem. The contract rate on a 30-year fixed mortgage rose 19 basis points to 7.49% in the week ended Oct. 2, its highest point since November 2023, according to Mortgage Bankers Association. Mortgage activity fell in response.

Europe

A sudden selloff of French bonds has stirred memories of the sovereign debt crisis that cascaded across Europe between 2009 and 2015. France has been running one of the euro area’s largest budget deficits. The extra yield demanded by investors to hold French 10-year bonds compared with those of Germany recently hit its highest since 2011.

German factory orders fell the most since January, a stumble for the manufacturing sector as it tries to mount a sustained turnaround. Demand dropped 10.6% in August, following a 3.2% gain in July.

The exodus of the uber-rich from the UK has become a $160 billion problem. Tax changes targeting the wealthy since Labour came to office in 2024 are taking a growing toll on London’s status as a global financial powerhouse.

Asia

China has allowed its provinces to tap 550 billion yuan ($82 billion) in unspent bond quotas saved from previous years, as Beijing adds to a stimulus effort aimed at meeting this year’s growth target. It’s the latest installment of the stimulus package unveiled by Beijing in late September to shore up economic growth that had slipped below this year’s target of 4.5%-5%.

Japan’s household spending fell for a ninth month even as wages continued to climb, showing consumers remain cautious as persistent inflation squeezes purchasing power. Outlays by households adjusted for inflation declined 3.1% in August from a year earlier.

India’s central bank will likely raise interest rates at successive meetings into next year as broadening price pressures push it deeper into a global tightening cycle. A growing number of economists are predicting a follow-up 25 basis-point increase at the Reserve Bank’s next decision on Dec. 4. Some see a further half-point of tightening in the first half of 2027, taking the policy rate to a two-year high.

Emerging Markets

Mexican annual inflation accelerated slightly less than expected in September, validating the central bank’s current rate pause while awaiting greater clarity on the price outlook. Consumer prices climbed 3.45% from September of last year.

Consumer prices in Chile rose slightly less than forecast last month despite another increase in fuel costs, as central bankers signal they’ll remain cautious on monetary policy. Chile central bankers led by Rosanna Costa see annual inflation slowing back to the 3% target by the second quarter of 2027.

World

The roughly 100 technology fortunes among the world’s 500 richest people gained a combined $845 billion through Sept. 30, the most ever for the first nine months of a year, according to the Bloomberg Billionaires Index. Fueling that surge were the same forces driving global markets: the artificial intelligence boom and soaring technology stocks, particularly in the US.

Central bankers in India and Uruguay raised interest rates. Poland, Iceland, Kenya, Peru, Romania, Tanzania, and Democratic Republic of Congo kept borrowing costs unchanged.