July's PMI's are in trend and won't be upsetting forecasts for the more closely ISM reports to be released at the outset of August. The manufacturing PMI comes in at 49.0 for July's flash, up a noticetable 2.7 points and just below breakeven 50 to indicate that slightly more respondents reported contraction compared to June in composite activity. This index has been in the 46-to-50 range for eight of the last nine months and has been a little higher than ISM manufacturing which came at 46.0 in June, which was the lowest reading for this index of the run.

PMi services slowed 2 points to to 52.4 for a sixth straight plus 50 score to indicate that a bit more respondents in this survey reported better activity compared to June. This index has been roughly even with ISM services whose index in June was 53.9.

New orders for the PMI manufacturing group contracted in July but less so than in June. The sample kept busy working down backlogs. This sample cited higher interest rates as a negative for customers.

New orders for services continued to rise but at a slowing pace though export sales were noted as improving. Both this sample and manufacturing reported marginal growth in employment. Price readings were mixed: input prices rose at the slowest pace since October 2020 but both sectors, especially services, were busy raising prices to customers.

Today's results came in below expectations leaving Econoday's Consensus Divergence Index at minus 3, very near the zero line to indicate that US economic data are, on net, coming in very near expectations.

Services have held in the 50 column the last five reports with the consensus for July at 54.0 versus June's 54.4. Manufacturing, at 46.3 in June, is expected to edge yet lower to 46.0 in July.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that 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.