The Institute
for Supply Management (ISM) announced on Wednesday that its Services PMI came
in at 51.4 per cent in July, recording a decline of 2.6 percentage points from
an unrevised June reading of 48.8 per
cent. The latest figure
indicated that economic activity in the U.S. services sector resumed expansion
after a one-month contraction.
Economists had forecast
the indicator to increase to 51.0 in July.
A reading above
50 signals expansion, while a reading below 50 indicates contraction.
According to
the report, the Production index surged by 4.9 percentage points to 54.5 per
cent in July, returning to growth after shrinking in June for the first time
since May 2020. In addition, the New Orders gauge soared by 5.1 percentage
points to 52.4 per cent, returning to growth after contracting in June for just
the second time since May 2020. The Employment measure jumped by 5.0 percentage
points to 51.1 per cent, indicating an increase in employment activity in the
services sector in July for the second time in 2024. The Inventories indicator climbed
by 6.9 percentage points to 49.8 per cent, indicating inventories decreased in
July for the second consecutive month. Meanwhile, the Supplier Deliveries
indicator fell by 4.6 percentage points to 47.6 per cent, indicating a faster
performance, a reversal after two straight months of slower deliveries. On the price front, the Prices index increased by 0.8 percentage
point to 57.0 per cent, indicating that prices paid by services organizations for materials and
services rose in July for the 86th month running.