- Prior was 52.7
- Prelim was 47.0
- Composite PMI 47.7 vs 47.5 prelim (52.3 prior)
I laugh when people freak out about declining manufacturing PMIs because it was obviously coming. Factories were running at 150% trying to catch up from the pandemic and eventually that would end.
But services should be doing better right now and that's truly worrisome.
ISM services are due at the top of the hour along with durable goods orders.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:
"US economic conditions worsened markedly in July, with business activity falling across both the manufacturing and service sectors. Excluding pandemic lockdown months, the overall fall in output was the largest recorded since the global financial crisis and signals a strong likelihood that the economy will contract for a third consecutive quarter.
"Tightening financial conditions mean the financial services sector is leading the downturn, with a further steep rise in interest rates from the FOMC since the survey data were collected likely to intensify the downturn. Higher interest rates, alongside the ongoing surge in inflation , have meanwhile spilled over to the consumer sector, meaning the surge in household spending on goods and activities such as travel, tourism, hospitality and recreation seen in the spring has now moved into reverse as household spending is diverted to essentials.
"Although employment continued to rise in July, the rate of job creation has also slowed sharply since the spring and looks set to weaken further in the coming months as firms cut operating capacity in line with weakening demand.
"The flip side of deterioration in demand is a welcome alleviation of price pressures, which hint at a peaking of inflation."