- Prior was 52.3
- Manufacturing 47.0 vs 49.3 expected (prior was 49.0)
- Composite 50.4 vs 52.0 prior
- "Cost pressures regained some momentum as the rate of input price inflation quickened on the back of greater fuel, wage and raw material costs."
- US firms were more upbeat in their outlook for output over the coming year in August
- August data indicated only a fractional rise in employment.
This is a soft reading and the US dollar is selling off. Yields have fallen further as well.
Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“A near-stalling of business activity in August raises doubts over the strength of US economic growth in the third quarter. The survey shows that the service sector- led acceleration of growth in the second quarter has faded, accompanied by a further fall in factory output.
“Companies report that demand is looking increasingly lethargic in the face of high prices and rising interest rates. A resultant fall in new orders received by firms in August could tip output into contraction in September as firms adjust operating capacity in line with the deteriorating demand environment. Hiring could likewise soon turn into job shedding in the coming months after a near-stagnation of employment in August.
“Rising wage pressures as well as increased energy prices have meanwhile pushed input cost inflation higher, which will raise concerns over the stickiness of consumer price inflation in the months ahead. One upside is that weak demand is starting to limit pricing power, which should help keep a lid on inflation around the 3% mark.
The uptick in prices isn't a big surprise given the increase in oil prices: