Growth in global services slowed in August, to 51.1 from 52.7 in July for the lowest plus-50 showing of the year. Global composite growth also slowed, down by a full point to 50.6 for its lowest reading since January's sub-50 score of 49.8; a positive here was a 4 tick rise in manufacturing (data released on Friday) to a still timid 49.0 level.

Yet new orders for services do remain positive, at 50.8 but down from July's 51.8. Future activity is expected to improve, up 1.3 points to 63.5 which is keeping the sample hiring at 51.2. Price pressures are increasing for inputs, up a point to 59.7, but easing for selling prices, down 6 tenths to 54.5. Country data for services were not provided in today's report.

JP Morgan Global Services PMI gives an overview of the global services sector. It is based on monthly surveys of over 5,500 executives from 15 of the world’s strongest economies, including the U.S., Japan, Germany, France and China which together account for nearly 80 percent of global services sector’s gross value added (GWA). It reflects changes in global output, employment, new business, backlogs and prices. The Global Services PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit in association with ISM and the International Federation of Purchasing and supply Management (IFPSM).

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. The J.P. Morgan Global Services PMI provides advance insight into the global services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of global 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. The PMI data are also used by many Central Banks to help make interest rate decisions.

The JP Morgan Global Services PMI data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the services sector accounts for the lion’s share of GDP of many advanced economies, this report has a big influence on the markets. In addition, its sub-indexes provide a picture of global output, employment, new business, backlogs and prices.