The Institute
for Supply Management (ISM) reported on Thursday that its Services PMI came in
at 51.5 per cent in August, recording a marginal gain of 0.1 percentage point
from an unrevised July reading of 51.4
per cent. The latest figure
indicated that economic activity in the U.S. services sector expanded for the
second successive month in August and at a slightly faster pace than in the
previous month.
Economists had predicted
the indicator to slip to 51.1 in August.
A reading above
50 signals expansion, while a reading below 50 indicates contraction.
According to
the report, the Production index declined by 1.2 percentage points to 53.3 per
cent in August, indicating a continuing expansion after one month of
contraction in June. In addition, the Employment measure dropped 0.9 percentage
point to 50.2 per cent, indicating an increase in employment activity in the
services sector in August for the second month in a row. Meanwhile, the New
Orders gauge increased by 0.6 percentage point to 53.0 per cent, indicating new
orders grew for the second consecutive month after contracting in June. The
Inventories indicator surged by 3.1 percentage points to 52.9 per cent, returning
to expansion territory after two straight months of contraction. Elsewhere, the
Supplier Deliveries indicator jumped by 2.0 percentage points to 49.6 per cent,
indicating faster performance for the second successive month.
On the price front, the Prices index rose by 0.3 percentage
point to 57.3 per cent, indicating that prices paid by services organizations for materials and
services increased in August for the 87th month running.
Commenting on
the data, Steve Miller, Chair of the Institute for Supply Management® (ISM)
Services Business Survey Committee, noted that slow-to-moderate growth was
cited across many industries, while ongoing high costs and interest-rate
pressures were often mentioned as negatively impacting business performance and
driving softness in sales and traffic.