2023-08-26 09:00:33
He Composite Purchasing Managers Index (PMI) of the United States has slowed down in July to 52 points, which is why it is at its lowest level in five months, according to S&P Global.
For this figure to exceed 50 implies that US economic activity is expanding. S&P has indicated that US companies reported an increase in activity, but that it has weakened compared to other months due to the lesser rebound in services, while the industry remained fundamentally unchanged in production.
New orders continued to rise, albeit at a slower pace. On its side, the “sustained increase” in export orders contributed to the rebound after the national market lost momentum, “generally, due to higher interest rates.”
Regarding prices, cost pressures were observed in services, but also affected the manufacturing sector. Later, employment was created at the beginning of the third quarter, both in services and in industry, although at an “insignificant” speed and at the slowest pace since January.
Pending orders hardly changed in July, although disparate trends were observed, as the industry “pulled” them to sustain production, although services showed “a minor increase” in them during the period at a rate that barely varied from the one that was scored in June.
“The general rate of growth of production […] was consistent with gross domestic product, which expanded at annualized quarterly rates of approximately 1.5% at the start of the third quarter,” said Chris Williamson, chief economist at S&P Global Market Intelligence, who, on the other hand, part, has highlighted that this speed is less than the 2% of the previous quarter.
In addition, the dynamics in prices, warns Williamson, send the “worrying” signal that additional drops in inflation below 3% “could be unlikely in the short term.”
In disaggregated terms, the Services Sector Commercial Activity PMI is at a five-month low, with 52.4 points, that is, a drop of two points compared to the sixth month of 2023.
For its part, the PMI for the Manufacturing Sector reached 49.0 from 46.3 in June, its worst mark in three months. Likewise, the Manufacturing Sector Production PMI, which measures whether company activity is higher, equal or lower than the previous month, stood at 50.2, an increase of 3.3 points.
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