Latest data released on January 26 showed significant divergence in manufacturing and services PMIs between Europe and the United States, with the global economic expansion pace slowing down. The preliminary reading of the US S&P Global Manufacturing PMI edged up to 51.9 in January, the Services PMI remained flat at 52.5, and the Composite PMI rose slightly to 52.8. However, all three indicators were slightly below market expectations, indicating that economic recovery momentum is weaker than anticipated.

The euro zone’s economic recovery situation is more complex. The January Manufacturing PMI rebounded to 49.4 but remained in contraction territory, while the Services PMI unexpectedly fell to 51.9. Core economies showed obvious divergent performances: Germany’s manufacturing and services PMIs improved more than expected, demonstrating economic resilience; France’s manufacturing PMI hit a nearly four-year high, but the services sector plummeted to 47.9, falling into contraction and reflecting weak domestic demand recovery.

IMF Managing Director Kristalina Georgieva warned at the Davos Forum that artificial intelligence will trigger a “labor market tsunami”, posing the most severe challenge to youth employment, and countries need to make early preparations to respond. Coupled with the escalating risk of a US government shutdown, Democratic senators explicitly opposed the Department of Homeland Security funding bill. If funds run out at the end of January, it will lead to a partial shutdown of the federal government, further disrupting global economic expectations.