| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 52.2 | 52.2 to 52.2 | 51.9 | 51.5 |
| Services Index | 51.3 | 51.3 to 51.9 | 51.2 | 50.7 |
Highlights
The services index comes in at 51.2 in the June final, revised marginally from 51.3 in the flash, but still better than 50.7 in May, for a third straight month of modest growth.
The composite at 51.9 for the June final compares with 52.2 in the flash, a very slight miss but nearly unchanged, and still up from 51.5 in May.
Here is some interesting text from S&P, the report's source:
New orders growth accelerated from the previous month. Panelists reported that new project wins and increased demand related to the FIFA World Cup helped lift new business inflows at the fastest pace since February.
Domestic demand remained the main driver of growth, as overall new export business declined for a seventh successive month, the latter largely blamed on uncertainty around government policy and tariffs. Historically muted business conditions continued to discourage firms from adding to staffing numbers, with a net loss of jobs reported for the third time in four months.
Anecdotal evidence indicated that the non-replacement of voluntary leavers also led to the decline in employment. Nonetheless, capacity pressures intensified, as US service providers registered a sixteenth successive monthly accumulation of outstanding business in June. Some companies also cited supply chain disruption and extended project lead times as factors behind the rise in backlogs.
Market Consensus Before Announcement
No revision is expected in the June final from the flash with the composite at 52.2 and services at 51.3. That is up a bit from 51.5 for composite and 50.7 for services in the May 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.