Preview: Due July 6 - U.S. June ISM Services - Sustaining a May improvement
We expect an unchanged June ISM services index of 54.5, sustaining a May pick up from April’s 53.6. Gasoline prices moving off their highs and the World Cup may both provide some support, preventing a correction from May’s improvement. May’s bounce may have been assisted by seasonal adjustments, but they remain supportive in June.
Other surveys are not giving any clear signals. The S and P services PMI saw some improvement but remains subdued. Empire State and Philly Fed services surveys were mixed in June with some signs of improvement, but the Richmond Fed’s turned marginally negative after an improvement in May.
We expect June readings of 57.5 for new orders and business activity, little changed from improved May readings of 57.7 and 57.3 respectively. We expect employment to respond to May’s improvements in the latter two series with a rise to 48.5 from 47.9, but for delivery times to continue moving off April’s rennet high of 56.8, falling to 54.5 from 55.2 in May, to complete the breakdown of the composite.
Prices paid do not contribute but like delivery times are likely to reflect an easing of inflationary pressures, slipping to 67.5 from May’s 71.3, which was the highest reading since August 2022.