U.S. July ISM Services - In a tight range, mixed detail
July’s ISM services index of 54.1 is almost unchanged from June’s 54.1 and keeps the index in a tight range implying respectable economic growth.
Positives came from new orders at 57.2 from 55.1, if still marginally below May’s 57.2, and business activity at 59.1 from 55.4, its highest since February.
However the employment index, like today’s ADP report, disappointed, falling to 47.4 from 51.2, contrasting a stronger ISM manufacturing employment index that we feel may have been flattered by seasonal adjustments.
Inflationary signals are mixed, with a slowing in delivery times to 52.8, the lowest since December, from 54.4, suggesting an easing of supply problems. However prices paid, which do not contribute to the composite, bounce to 70.3 from 67.7, still slightly below the levels seen in March, April and May, but implying a revival of risks in the Middle East.
