| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Composite Index | 52.0 | 53.2 | ||
| Services Index | 52.3 | 54.4 | 52.4 | 52.4 to 52.4 |
Highlights
The services PMI, at 52.3, ends July one tick below the mid-month flash but 2.1 points slower than June. Nevertheless, this is the fifth month in a row the index has held above the 50 monthly expansion line.
The ISM services index has also held above 50 for six straight months with a seventh plus-50 showing expected at the top of the hour. Yet, like the services PMI, slowing is the call for the ISM, from June's 53.9 to a consensus 53.0 for July.
Output and new orders both slowed for the PMI sample reflecting high interest rates according to the report. A plus is a sharper rise in foreign orders as is a slowing rise in input costs. Selling prices, nevertheless, rose at a faster pace. Employment was flat.
The ISM services index has also held above 50 for six straight months with a seventh plus-50 showing expected at the top of the hour. Yet, like the services PMI, slowing is the call for the ISM, from June's 53.9 to a consensus 53.0 for July.
Output and new orders both slowed for the PMI sample reflecting high interest rates according to the report. A plus is a sharper rise in foreign orders as is a slowing rise in input costs. Selling prices, nevertheless, rose at a faster pace. Employment was flat.
Market Consensus Before Announcement
No change at the mid-month's 52.4 is the call for the PMI service's July final.
Definition
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.
Description
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.
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.
