| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Composite Index | 52.9 | 53.0 | ||
| Services Index | 52.9 | 53.7 | 53.1 | 51.8 to 53.1 |
Highlights
The S&P Global US Composite Purchasing Managers' Index came in at 52.9 in June, down from 53.0 in May signaling a loss of some momentum in services sector activity.
Tariffs meanwhile underpinned a further steep increase in operating expenses and selling prices, although inflation rates softened compared to May. Confidence in the outlook also remained below par, but firms were sufficiently optimistic to add jobs at the fastest rate for five months, the report said.
The US Services PMI Business Activity Index recorded 52.9 in June, down from 53.7 in May, and just above expectations of 53.1 in the Econoday survey of forecasters.
New business volumes continued to rise last month, with growth solid but also down since May. There were some suggestions from panelists of an underlying improvement in economic activity, especially in local markets and from domestic clients more broadly.
On the flipside, international sales declined for a third month running, with foreign demand dampened by tariffs and U.S. trade policy uncertainty. On average, the decline in services exports during the second quarter was the steepest since the end of 2022, the report said.
Trade worries and anxiety around government policies have moderated since April, but the report noted that companies generally remained less upbeat than prior to the inauguration of President Trump.
The outlook for activity remains positive overall. Some panelists are hopeful of a more stable economic environment and are planning to launch new services over the coming year, it said. However, sentiment softened since May and remains well below the survey average. Panelists continued to signal some worries over trade and broader federal government policy uncertainty.
Tariffs meanwhile underpinned a further steep increase in operating expenses and selling prices, although inflation rates softened compared to May. Confidence in the outlook also remained below par, but firms were sufficiently optimistic to add jobs at the fastest rate for five months, the report said.
The US Services PMI Business Activity Index recorded 52.9 in June, down from 53.7 in May, and just above expectations of 53.1 in the Econoday survey of forecasters.
New business volumes continued to rise last month, with growth solid but also down since May. There were some suggestions from panelists of an underlying improvement in economic activity, especially in local markets and from domestic clients more broadly.
On the flipside, international sales declined for a third month running, with foreign demand dampened by tariffs and U.S. trade policy uncertainty. On average, the decline in services exports during the second quarter was the steepest since the end of 2022, the report said.
Trade worries and anxiety around government policies have moderated since April, but the report noted that companies generally remained less upbeat than prior to the inauguration of President Trump.
The outlook for activity remains positive overall. Some panelists are hopeful of a more stable economic environment and are planning to launch new services over the coming year, it said. However, sentiment softened since May and remains well below the survey average. Panelists continued to signal some worries over trade and broader federal government policy uncertainty.
Market Consensus Before Announcement
No revision expected from the flash at 53.1 in services.
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.
