US services activity rebound on business, new orders boost
Published : Wednesday, 7 August, 2024 at 12:00 AM Count : 185
WASHINGTON, Aug 6: The US services sector bounced back in July on stronger business activity, new orders and employment, according to survey data released Monday, striking a positive note amid downbeat market sentiment.
The Institute for Supply Management's (ISM) services index stood at 51.4 percent last month, up from 48.8 percent in June. This signals the dominant sector of the world's biggest economy is expanding.
The number was slightly above the analyst consensus forecast of 51.3 percent according to Briefing.com, and back above the 50-point threshold separating growth from contraction.
"Economic activity in the services sector expanded in July, a trend that has been interrupted only three times -- though twice in the last four months -- since early in the coronavirus pandemic," said the ISM report.
"Survey respondents again reported that increased costs are impacting their businesses," said ISM survey chair Steve Miller.
Miller added: "Comments continued to express a wait-and-see attitude regarding the upcoming presidential election, with one respondent expressing concern over potential increases in tariffs."
But overall, the outcome was "refreshingly stronger-than-expected," said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics.
This marks "a welcome counterweight to the downbeat messages from the manufacturing ISM, jobless claims, construction activity and payroll employment reports last week," they added in a note.
This might not turn around the US equity sell-off, but "suggests that services output is far from crashing" even if the sector is slowing, the economists added.
In July, the business activity index rose 4.9 percentage points to 54.5 percent, while the new orders index picked up 5.1 percentage points to 52.4 percent, the ISM report said.
Meanwhile, the employment index, up five percentage points to 51.1 percent, expanded for the second time in 2024. Ten services industries reported growth, while eight reported a decrease. —AFP
