Services PMI 42.9 vs 46.6 expectedPrior 46.5Manufacturing PMI 48.9 vs 52.2 expectedPrior 52.8Composite PMI 43.5 vs 47.7 expectedPrior 47.6Welp, there goes the floor. The pain is starting to hit now as the fallout from the Middle East conflict intensifies. The headline services print and the composite print are the lowest in 66 months, marking the steepest decline in French economic activity in five-and-a-half years. Yes, it's the biggest dip in activity since the Covid pandemic period.Firms frequently cited fuel and energy costpressures, as well as general economic angst, as reasons forlower output.And after some frontloading activity in March and April, manufacturing output also fell back into contraction territory in May.In adding insult to injury, inflation pressures continue to accelerate with cost pressures being the strongest since May 2023. The graph below pretty much says it all:If you're not thinking about stagflation hitting Europe just yet, this definitely ought to be a good wake up call to that.S&P Global notes that:"May's 'flash' PMI survey for France provides a dire setof numbers. The inflationary impact of the oil-priceshock continues to proliferate, with price indicesin both manufacturing and services moving higheronce again. The surge in oil prices has hit householdsand businesses both directly at the fuel pumps, andindirectly as higher transportation and productioncosts are passed through to final goods and services.The concern is that a broader uplift in the economy'soverall price level raises the risk of further demanddestruction. Alarmingly, we saw private sector neworders plummet in May, giving us a clear indication thatthis shock has materially lifted recession risks for theeurozone's second-largest economy." This article was written by Justin Low at investinglive.com.