US ECONOMY & POLITICS

US Manufacturing Growth Weakens to Two-Year Low as Orders Slump – Bloomberg, 7/1/2022

• A measure of US manufacturing activity weakened in June to a two-year low as new orders contracted, restrained by lingering supply constraints and some softening in demand.
• The Institute for Supply Management’s gauge decreased to 53 last month from 56.1 in May, according to data released Friday.
• The group’s index of new orders dropped nearly 6 points to 49.2, the poorest result since May 2020, when the economy was digging its way out of the pandemic-induced recession.
• The ISM gauge of manufacturer inventories ticked up to 56, near the highest reading since 2010.
• In a sign that supply chains and capacity constraints appear to be easing, ISM’s measures of delivery times and backlogs both declined in June to the lowest levels since 2020.
• Meanwhile, the purchasing managers group’s production index climbed to a four-month high.
• And for a third straight month, a gauge of price paid by producers declined, suggesting costs of raw materials are starting to ease. However, the index remains elevated and concerns about high petroleum prices linger.
• The ISM’s employment index fell to the lowest since August 2020, suggesting firms are struggling to find workers.

U.S. construction spending unexpectedly falls in May – Reuters, 7/1/2022

• U.S. construction spending unexpectedly fell in May as single-family homebuilding stalled, more evidence that the Federal Reserve’s aggressive monetary policy tightening was slowing the economy.
• The Commerce Department said on Friday that construction spending slipped 0.1% in May after increasing 0.8% in April. Economists polled by Reuters had forecast construction spending would rise 0.4%. Construction spending increased 9.7% on a year-on-year basis in May.
• Spending on private construction projects was unchanged in May after advancing 1.1% in April. Investment in residential construction rose 0.2%, though spending on both single-family and multi-family housing projects was flat.
• Investment in private non-residential structures like gas and oil well drilling fell 0.4% in May.
• Spending on public construction projects declined 0.8% after slipping 0.3% in April. Outlays on state and local government construction projects dropped 0.8%, while federal government spending tumbled 1.7%.

Julian Assange Files Fresh Appeal Against Extradition to U.S. – Wall Street Journal, 7/1/2022

• Julian Assange has appealed his extradition from the U.K., prolonging legal wrangling over whether the WikiLeaks founder should be sent to the U.S.—amid growing questions about the Biden administration’s appetite to pursue him over leaking classified material.
• Gareth Peirce, a senior partner at Birnberg Peirce & Partners who is representing Mr. Assange, said that two appeals were filed on Thursday to the U.K. high court to contest his extradition. The court must now decide whether the appeals can be heard.
• British Home Secretary Priti Patel recently approved an order to extradite Mr. Assange, an action that could have been a final step to his removal without the new filing. He had until Friday to bring the appeal.
• Mr. Assange’s lawyers are appealing both Ms. Patel’s decision and elements of a ruling by District Judge Vanessa Baraitser last year, which broadly focused on whether Mr. Assange would get a fair trial in the U.S. The details of the appeals weren’t made public.

EUROPE & WORLD

Factory data dampen global hopes for ‘soft landing’ – Reuters, 7/1/2022

• Global manufacturing struggled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while China’s strict COVID-19 lockdowns and Russia’s invasion of Ukraine added to supply chain disruptions, surveys showed.
• The picture was equally gloomy in the euro zone, where manufacturing output also slowed. S&P Global’s manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in June from May’s 54.6, its lowest level since August 2020.
• Earlier, surveys showed China’s factory activity recovering in June, though a slowdown in Japan and South Korea, as well as a contraction in Taiwan, highlighted the strain from supply disruptions, rising costs and persistent material shortages.
• China’s Caixin/Markit manufacturing PMI rose to 51.7, marking the first expansion in four months and well above analysts’ expectations for a reading of 50.1.
• South Korea’s S&P Global PMI fell to 51.3, dropping for a second straight month, reflecting supply constraints and a truckers’ strike.
• India’s PMI showed factory output expanded at its slowest pace in nine months, as elevated price pressures restricted demand and output.

China’s Xi Jinping Says Hong Kong’s Loyalty to Beijing Will Ensure Prosperous Future – Wall Street Journal, 7/1/2022

• Marking a quarter-century since Beijing regained control over this former British colony, Chinese leader Xi Jinping urged Hong Kong to show more patriotic fervor and rally around his vision of a strong and unified China as he prepares to extend his rule.
• In a Friday speech wrapping up a two-day visit to Hong Kong, Mr. Xi declared that this Asian financial center is again poised to prosper after Beijing imposed broad political changes to sweep aside the social unrest that periodically plagued the city since its handover to China in 1997.
• The key guarantors of Hong Kong’s future, he said, is a shared love for the Chinese motherland and loyalty to Communist Party rule.
• The visit was Mr. Xi’s first trip outside mainland China in nearly 2½ years.
• His Thursday arrival, ahead of the July 1 anniversary, came exactly two years after Beijing imposed a sweeping national-security law on Hong Kong, paving the way for authorities to end a wave of dissent that had drawn millions of people onto the streets and alarmed the Communist Party leadership with what they saw as a direct challenge to their authority.

Airbus Wins First Major China Jet Order Since Before Pandemic – Wall Street Journal, 7/1/2022

• China placed a large order on behalf of three of its biggest airlines for close to 300 jets from Airbus, the first major commitment from the country to new planes since before the pandemic.
• Boeing lost out to rival Airbus in the order disclosed Friday, though that doesn’t preclude a follow-up deal for the U.S. company’s jets. China Southern Airlines Co.—the biggest customer of Boeing’s troubled 737 MAX in China—was among three airlines to buy Airbus jets.
• China Southern, Air China and China Eastern Airlines are set to take delivery of a total of 292 new aircraft starting in 2023, the companies said in separate statements.
• Together, the deals are valued at $37 billion before customary discounts given to airlines, according to the statements.

Factmonster – TODAY in HISTORY

• The Battle of Gettysburg, which marked the turning point in the Civil War, began. (1863)
• Canada became a self-governing dominion of Great Britain under the British North America Act. (1867)
• Theodore Roosevelt and his Rough Riders fought the battle of San Juan Hill in the Spanish-American War. (1898)
• Income tax withholding began in the United States. (1943)
• The United States, Britain, the Soviet Union, and 58 other nations signed the Nuclear Nonproliferation Treaty. (1968)
• After 156 years of British colonial rule, Hong Kong was returned to China. (1997)
• Vermont’s civil unions law went into effect. (2000)
• Croatia became the 28th member of the European Union. (2003)