US PMI at Eight-Month High; Costs, Supply Delays Rise
Services drove the composite PMI to 53.6 in July. Manufacturing output slipped to a four-month low. Chris Williamson warns Middle East tensions could worsen supply disruptions.
Alpha Score of 51 reflects moderate overall profile with moderate momentum, moderate value, moderate quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
US business activity picked up in July, with S&P Global's Flash Composite PMI Output Index climbing from 51.9 to 53.6, the highest reading in eight months. The services sector led the gain. Its Business Activity Index rose from 51.2 to 53.6, also an eight-month high.
Manufacturing lost momentum. The Manufacturing PMI edged down to 53.8 from 53.9, while the Manufacturing Output Index dropped to 53.6 from 56.2, a four-month low. Inventory-driven strength from earlier in the year faded, S&P Global said.
Chief Business Economist Chris Williamson said the survey points to annualized GDP growth of about 2.0% in the third quarter, up from roughly 1.2% in the second. Businesses added jobs for the first time in three months.
Williamson cautioned that some of July's strength may prove temporary. Spending got a lift from the FIFA World Cup and USA 250 anniversary celebrations, he said.
Beneath the surface, cost pressures reemerged. Manufacturers reported worsening supply chain delays and rising input prices as inventory accumulation slowed. Williamson warned that the latest escalation in the Middle East will likely aggravate supply disruptions and inflation, raising downside risks for growth.
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