Closing summary Finally... consumer confidence across the eurozone has risen very slightly, but is still rather weak. The European Commission’s gauge of consumer morals rose by 0.3 points in August to -14.7, suggesting a lot of understandable anxiety about the economic prospects. That’s all for the week, I think. A reminder of the key points: Britain’s national debt has hit £2tn for the first time ever, jumping over 100% of GDP as the cost of Covid-19 mount. Chancellor Rishi Sunak has warned that the pandemic has put heavy strain on the public finances, as some economists urge the government not to tighten fiscal policy too quickly given the weak economy. Activity across the UK private sector has jumped, at the fastest rate in seven years The slump in manufacturing may also have bottomed out this month, according to the CBI... ...as UK retail sales jump to pre-pandemic levels. The Crossrail saga rolls on, with fresh delays and a rising bill US firms have also reported a pick-up in growth... ...as home sales also rally strongly But eurozone company growth has faltered this month As have shares in London, where the FTSE 100 has dipped below 6,000 points and is on track to close at a three-week low. Have a lovely weekend. GW Neil Birrell, chief investment officer at Premier Miton, isn’t delirious about the jump in America’s PMI this month. He points out that other data has been less encouraging, such as yesterday’s jump in jobless claims. “The US PMIs showed a better outlook for the economy, but it’s been a mixed week; good housing data, disappointing jobs data, which is probably unsurprising given the steep recovery we have seen. All eyes will be on the Fed’s meeting at Jackson Hole next week to see what policy support will be forthcoming.” US home sales surge as economy recovers Oof! US home sales have surged by nearly a quarter, signalling that America’s housing market is shaking of its Covid-19 blues. Existing home sales (ie, excluding new builds) jumped by 24.7% in July compared with June, much stronger than expected. Average prices were 8.5% higher than a year ago too, hitting a new high of $304,100 CNBC has more details: Sales of existing homes soared 24.7% in July compared with June, according to the National Association of Realtors. These numbers represent closed sales, meaning contracts signed in May and June. That is the strongest monthly gain in the history of the survey, going back to 1968, and the highest sales pace since December 2006. Sales were 8.7% higher compared with July 2019. US PMI jumps as economic recovery picks up Activity across America’s private sector is growing at the fastest pace in over a year. That’s according to IHS Markit’s survey of US purchasing managers, just released. It shows a “strong upturn in business activity in August”, at both service sector firms and factories. Markit says: Notably, it marked the first rise in service sector activity since the start of the year, while goods manufacturers recorded the fastest increase in production since January 2019. Encouragingly, the survey also found that new business has picked up this month for the first time since February, just before the Covid-19 pandemic hit the US economy. Manufacturing firms registered a steeper expansion in new order inflows than in July, while service providers signalled a renewed increase in sales. Companies commonly stated that new business growth stemmed from increased marketing efforts and the resumption of client operations. The reopening of economies worldwide also helped to boost new export orders, with foreign sales expanding at the sharpest pace since September 2014. This has lifted the IHS Markit Flash U.S. Composite PMI Output Index up to 54.7 in August. That’s much stronger than July’s 50.3, which was worryingly close to stagnation. The US stock market has opened very cautiously, with the main indices basically flat in early trading. Dow: down 13 points or 0.05% at 27,726 S&P 500: down 4.8 points or 0.1% at 3,380 Nasdaq: down 8 points or 0.07% at 11,256.59 The futures market had been signalling a weaker open, but somehow sentiment turned a little warmer - despite yesterday’s jump in weekly unemployment claims in America. Mohamed El-Erian of Allianz knows why -- the huge amounts of liquidity being offered by central banks is propping asset prices up, even though the wider economic picture is much darker. Markets turn south The mood in the markets has deteriorated as the weekend approaches. The FTSE 100 index is now down almost 1% at 5956, a drop of 56 points, as the surge in August’s PMIs fails to cheer the City. That’s the lowest level since August 3rd. We can’t even blame the stronger pound either. Sterling has now dropped, as the UK and EU again failed to make progress on a post-Brexit trade deal. The pound has lost a cent against the US dollar, down to $1.311, after EU negotiator Michel Barnier accused the British government of “wasting valuable time” Online electricals vendor AO.com is doing its bit to combat Britain’s looming unemployment crisis. AO, which yesterday reported a surge in orders during the pandemic, is planning to hire 650 staff to cope with the new demand. Some jobs are quite traditional - delivery drivers and gas engineers. Some, such as a TikTok specialist, are not. Will Crossrail ever arrive? Europe’s largest railway infrastructure project - from Reading and Heathrow, across central London, to Abbey Wood and Shenfield - has been delayed again. It now won’t arrive until 2022 - partly due to disruption caused by Covid-19 - pushing the total cost up by another £450m. The final bill is now approaching £19bn. Our transport correspondent Gwyn Topham explains: Crossrail, the mass-transit train line through London, has been further delayed until 2022 and gone another £450m over budget. Transport for London said that the temporary pause in construction and ensuing slowdown because of Covid-19 distancing requirements had only partially contributed to the latest delays, which mean the Elizabeth line will open more than three years late and cost almost £4bn more than originally budgeted. The announcement follows a Crossrail board meeting, which concluded that any 2021 opening date was an unrealistic target, only a month after it ruled out opening next summer. Here’s our news story on this morning’s surprisingly strong UK PMI survey: The CBI’s Alpesh Paleja recommends caution about this morning’s retail sales and PMI data: Just in: the downturn in UK manufacturing may have bottomed out. The CBI’s latest survey of UK factories shows that output volumes in the three months to August continued to fall quickly, but the pace of decline eased somewhat from July’s record decline. The survey of 278 manufacturers found that output volumes declined in 16 of 17 sub-sectors, led by falls in mechanical engineering, food, drink & tobacco, and motor vehicles & transport equipment sub-sectors. Both total and export order books remained well below their long-run averages, showing that the recovery could be slow. Looking ahead, manufacturers expect output to fall at a much slower pace in the next three months.