US Services PMI fell to 51.6 in June from 53.4 in May and well below analysts’ estimates of 53.5, a preliminary estimate showed.
• Primary downward pressure came from a sharp fall in new orders, with demand falling for the first time since July 2020, while new export orders plunged at the fastest pace since December 2020.
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Create account Try a demo Download mobile app Download mobile app• The rate of job creation eased to the softest in four months. Meanwhile, input prices eased to a five-month low while the pace of output charge also softened to the lowest since March 2021.
• Sentiment remained positive but was at its lowest since September 2020 amid a worsening outlook for inflation and growth.
The Manufacturing PMI plunged to 52.4 in June from 57.0 in previous month, well below market estimates of 56.0 and as contractions in output and new orders weighed.
• Production and new sales declined for the first time since mid-2020 due to deteriorating client demand, as inflation, material shortages and delivery delays led some customers to pause or lower their purchases of goods and were accompanied by a renewed decrease in foreign client demand.
• Input prices rose at the slowest since April 2021 and output charges increased the least since January.
• In line with a renewed fall in backlogs of work, manufacturers expanded their workforce numbers at the softest pace since February. Lastly, goods producers registered the lowest degree of confidence in the outlook for output over the coming year for 20 months in June.
US Services PMI reached the lowest level in five months, while the Manufacturing PMI pointed to the slowest growth in factory activity for almost two years. Source: Bloomberg via ZeroHedge
Weak performance of the manufacturing and services sector pushed the US Composite PMI to 51.2, which is the lowest level since January 2022. Source: S&P Global, US Bureau of Economic Analysis
Recent PMI data pointed out that demand for goods and services is declining, which only highlights the recession risks and notable weakness in Q2 GDP. Some analysts believe that covid stimulus spending artificially drove up retail demand and created a temporary spike in jobs. At the moment the labour market looks strong however, if the situation starts to worsen in the upcoming weeks, it will be another confirmation that the scenario of a strong economic slowdown is materializing.
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