Manufacturing and services PMIs
  • Prior was 54.4
  • Manufacturing 49.0 vs 46.2 expected
  • Composite 52.0 vs 53.2 prior
  • "Challenges in foreseeing future demand trends weighed on expectations for the outlook over the coming year, driving confidence to the lowest in 2023 to date. Relatively subdued optimism stemmed from the service sector, where predictions for business activity weakened. Manufacturers, however, expressed greater positive sentiment towards the outlook, as expectations reached the strongest since April 2022"

The fall in the services index ends a streak of five months of improvement while manufacturing improved close to the 50 mark. The services one is a much larger part of the US economy and the disappointment today rhymes with the soft numbers from Europe.

The rise in optimism from manufacturers is another green shoot for that sector, which may come out of recession late this year or early next year and offer an upside risk for 2024, though autos could undo that.

Here is the overall assessment from S&P Global:

US companies signalled a further rise in business activity during July, with the service sector continuing to drive growth. Nonetheless, the rate of expansion eased to the slowest for five months, as service providers registered a softer upturn in output and manufacturers reported broadly unchanged levels of production at the start of the third quarter. New orders remained in expansion territory, albeit rising at a softer pace. A sustained rise in new export orders for services helped support the upturn as domestic demand lost some momentum, often due to higher interest rates. On the price front, elevated cost pressures continued to be led by the service sector. However, manufacturers saw a renewed rise in input prices, and services firms reported a slower uptick in operating expenses.

They don't always publish the price indexes but they did this month:

SP prices
Should we be worried about that uptick in services prices?