July flash PMI slipped to 53.8, missing the 54.3 estimate, as supply chain delays and price pressures intensified. The composite reading still points to 2% annualized GDP growth, but the chief economist warned that the upturn may not be the start of a lasting trend.
Alpha Score of 52 reflects moderate overall profile with weak momentum, moderate value, moderate quality, moderate sentiment.
The S&P Global flash U.S. manufacturing PMI came in at 53.8 for July, below the 54.3 consensus estimate but still above the 50 expansion threshold. The services PMI printed at 56.0, a 28-month high, against a 55.0 forecast.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the data were "broadly consistent with GDP growing at an annualized 2.0%" in the third quarter, up from the 1.2% pace signaled for the second quarter. July saw employment rise for the first time in three months, though Williamson cautioned that some of the improvement "may prove short-lived" as hospitality spending was boosted by the FIFA World Cup and USA 250 anniversary activities.
"It was also worrying – though not unexpected – to see manufacturing growth weaken as some of the stock building seen in prior months showed signs of fading," Williamson said. The month brought a "concerning intensification of supply chain delays and accompanying renewed upturn in price pressures, constraining growth and subduing demand." He added that events in the Middle East "will have only further exacerbated these supply chain and price worries and raise downside risks to the near-term outlook for the economy, hinting that July's upturn may not be the start of an improving trend."
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