U.S. Service Sector Growth Moderated in July -- IHS Markit
By Xavier Fontdegloria
Activity in the U.S. services sector cooled in July compared
with the previous months as the growth in new business softened,
according to data from IHS Markit released Wednesday.
The final U.S. Services Purchasing Managers' Index for July
stood at 59.9, down from 64.6 in June and virtually higher than the
flash estimate of 59.8. Economists polled by The Wall Street
Journal expected the final services PMI to come in at 59.8.
The reading signals a strong and broad-based growth rate for the
services sector, as it is well above the 50-point threshold that
separates expansion from contraction. However, it also suggests a
slowdown compared with previous months, as the July reading is a
"The pace of U.S. economic growth cooled in July ... but
remained impressively strong to suggest that gross domestic product
will rise robustly again in the third quarter," said Chris
Williamson, chief business economist at IHS Markit.
Stimulus measures and reopening of the economy continued to
boost demand for goods and services, most notably among households
and especially in consumer-facing services such as travel and
hospitality, he said.
New business rose fast in July supported by a pick-up in client
demand, although the expansion pace softened. Some companies
reported that capacity constraints hampered activity growth,
particularly shortages of suitable candidates for open
As a result of challenges finding staff, the rate of job
creation also eased, IHS Markit said.
On the price front, both costs and prices passed on to customers
increased at a substantial pace in July, but the rate of increase
"It is encouraging to note that the overall rate of increase of
selling prices for goods and services continued to moderate from
's recent peak," Mr. Williamson said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
August 04, 2021 10:17 ET (14:17 GMT)
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