Notizie economiche
03.07.2024

U.S. services sector activity unexpectedly contracts in June - ISM

The Institute for Supply Management (ISM) announced on Wednesday that its Services PMI came in at 48.8 per cent in June, recording a decline of 5.0 percentage points from an unrevised May reading of 53.8 per cent. The latest figure indicated that economic activity in the U.S. services sector contracted again in June after May’s rebound.

Economists had predicted the indicator to slip to 52.5 in June.

A reading above 50 signals expansion, while a reading below 50 indicates contraction.

According to the report, the Production index plunged by 11.6 percentage points to 49.6 per cent in June, indicating contraction for the first time since May 2020. In addition, the New Orders gauge tumbled by 6.8 percentage points to 47.3 per cent, indicating shrinkage for the first time since December 2022. The Employment measure dropped by 1.0 percentage point to 46.1 per cent, indicating employment activity in the services sector contracted in June for the fifth straight month. Elsewhere, the Inventories indicator plummeted by 9.2 percentage points to 42.9 per cent, indicating inventories decreased in June after two consecutive months of growth. The Supplier Deliveries indicator slipped by 0.5 percentage point to 52.2 per cent, indicating slower performance for the second successive month. On the price front, the Prices index decreased by 1.8 percentage points to 56.3 per cent, indicating that prices paid by services organizations for materials and services increased in June for the 85th month running.

Commenting on the data, Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee noted that the June fall in the composite index was a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment. “Survey respondents report that, in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs,” he added. 

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