US composite pmi
  • Prior was 57.5
  • Services 51.6 vs 53.5 expected
  • Prior services 53.5
  • Composite 51.2 vs 53.8 prior
  • Services rate of input price inflation was the softest for five months and eased notably from May
  • The rise in manufacturing input prices was the slowest since April 2021

This is a sizeable miss and evidence of a quick slowdown in demand, though it's still in positive territory (above 50). This report is consistent with a shifting narrative away from inflation worries and towards growth worries.

S&P Global: "business confidence slumped to one of the greatest extents seen since comparable data were available in 2012, down to the lowest since September 2020."

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

“The pace of US economic growth has slowed sharply in June, with deteriorating forward-looking indicators setting the scene for an economic contraction in the third quarter. The survey data are consistent with the economy expanding at an annualized rate of less than 1% in June, with the goods-producing sector already in decline and the vast service sector slowing sharply.

“Having enjoyed a mini-boom from consumers returning after the relaxation of pandemic restrictions, many services firms are now seeing households increasingly struggle with the rising cost of living, with producers of non-essential goods seeing a similar drop in orders.

“There has consequently been a remarkable drop in demand for goods and services during June compared to prior months.

"Businesses have become much more concerned about the outlook as a result of the rising cost of living and drop in demand, as well as the increasingly aggressive interest rate path outlined by the Federal Reserve and the concomitant deterioration in broader financial conditions. Business confidence is now at a level which would typically herald an economic downturn, adding to the risk of recession.

“A corollary of the drop in demand was less pressure on prices, with the survey’s inflation gauges for firms’ costs and their selling prices falling sharply in June to suggest that, although still elevated, price pressures have peaked.”