- Lowest since Feb
- Prelim was 52.4
- Prior was 54.4
- Final composite PMI vs 52.0 prelim
- Prior composite PMI was 53.2
- Business activity and new orders increased again, albeit at slower rates
- cost pressures softened. Input prices rose at the slowest pace since December 202
The ISM services data is due at the top of the hour.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:
"The service sector remains the main engine of growth in the US economy, though there are signs of the motor spluttering amid rising headwinds. Business activity rose in July at the slowest rate since February, with the rate of expansion sliding further from May's recent peak in response to sharply reduced growth of new business. Although spending from foreigners in the US continues to grow strongly as the post-pandemic travel surge shows signs of persisting, demand growth waned from domestic customers, often linked to the rising cost of living and higher interest rates.
"Reflecting concerns that the upturn is faltering, companies have become much less optimistic about the outlook and reined-in their hiring as a result.
"An additional concern is that prices charged for services rose at an accelerated rate in July, often linked to higher staff costs. Such a wage-led stickiness of inflation in the vast service sector will naturally worry policymakers.
"With the weakening service sector expansion accompanied by a near-stalled manufacturing sector, the overall message from the surveys is that economic growth weakened at the start of the third quarter, cooling to an annualized rate of around 1.5%. The survey's price gauges, however, continue to signal a stubbornness of inflation around the 3% mark."
There are worsening signs in the services sector as the post-pandemic revenge spending ends and rate hikes bite.
