Economic Report: Service side of the economy slows slightly, ISM finds, but ‘sales have been steady’


Share post:

The numbers: A measure of business conditions for service sector companies like hotels, restaurants and hair salons slowed in July, but still signaled an expanding economy.

The service-sector index fell to 52.7% from 53.9% in the prior month.

That was a larger drop than economists predicted. Economists forecast the Institute for Supply Management’s survey to slow to 53.3%.

The index has been in expansionary territory for seven months in a row, however. Numbers above 50% indicate growth.

“I think we’re on solid footing right now. It’s just hard to see what might happen down the road,” said Anthony Nieves, chairman of the survey.

Key details:

  • The index of new orders dipped to 55.0%  from 55.5%. “Sales have been steady,” a senior construction executive told ISM.

  • The production gauge fell 2.1 points to 57.1%

  • The employment barometer dropped 2.4 points to 50.7% 

  • The prices-paid index, a measure of inflation, grew to 56.8% from 54.1% the prior month. “Supplier costs (are) not coming down as much as expected,” a wholesale trade executive told ISM.

Big picture: Demand for services has been strong in the aftermath of the pandemic. People’s desire to travel and go to restaurants has been a balancing force while the industrial side of the economy remains stuck.

Looking ahead: “Even though the risks of a recession may be easing, that doesn’t mean the economy is set to enjoy a strong performance over the second half of the year,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

Market reaction: The Dow Jones Industrial Average
and S&P 500
fell slightly in Thursday trades.

Source link

Alexandra Williams
Alexandra Williams
Alexandra Williams is a writer and editor. Angeles. She writes about politics, art, and culture for LinkDaddy News.

Recent posts

Related articles