The services PMI ends June at a respectable 54.4, up slightly from 54.1 at the mid-month flash but down a half point from 54.9 in May. Despite the dip in the composite, new orders are described as improving including new export orders which rose for a second month.

Output is described as solid and business optimism is improving and with that, hiring plans as well. Wages for S&P's sample are pushing up costs which in sum rose at the sharpest pace in five months. Competition, however, is keeping the sample from passing through the higher costs to customers.

The services PMI has been outperforming the ISM services index in recent months. The latter will be updated at the top of the hour with only modest improvement at a nearly flat month-over-month rate expected.

No change at the mid-month's 54.1 is the call for the PMI service's June final.

US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.

Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.