Preview: Due June 23 - U.S. June S&P PMIs - Manufacturing not quite as strong, marginal improvement in services
We expect a correction lower in June’s S and P manufacturing PMI to a still firm 54.5 from 55.3, but a modest improvement in the S and P services PMI to a still subdued 51.0, from 50.7 in May.
May’s S and P manufacturing PMI was the strongest since May 2022, and backed by an improved ISM manufacturing index. However we feel a further acceleration will be difficult to achieve. May manufacturing output paused after a strong April rise, and June’s Empire State manufacturing survey lost momentum. June’s Philly Fed manufacturing index picked up from a negative May, but remains off recent highs.
The S and P services index has been subdued in recent months, though a March dip below neutral was not sustained. Consumers are restrained by weakness in real disposable income. The Middle East peace deal is unlikely to have a strong positive impact near term, though we expect a modest rise from May’s 50.7 reading back to April’s level of 51.0. The S and P services PMI has been underperforming the ISM’s in recent months.
