Preview: Due August 5 - U.S. July ISM Services - Keeping to a tight range
We expect a July ISM services index of 54.5, returning to May’s level after a dip to 54.0 in June. The index has been in a tight range since December, apart from a brief bounce to 56.1 in February.
The S and P services PMI saw quite a strong bounce in July to 53.6 from 51.2 but is not well correlated with the ISM services index which it appears to be catching up with.
In July’s ISM services detail we expect business activity and new orders to both rise to 57.0, stronger than in June but not quite as strong as in May. We expect this to outweigh a correction lower in employment after a sharp June bounce above neutral and continued normalization in delivery times from recent highs inflated by Middle East supply disruptions.
Prices paid do not contribute but like delivery times are likely to show a continued normalization, falling to 65.0, the lowest since February, from 67.7 in June and 71.3 in May, which was the highest reading since August 2022.