The S&P Global US composite PMI fell to 54.1 in its preliminary estimate for August from 54.3 in July, suggesting that US private sector business activity continues to grow at a healthy pace. This was better than market expectations at 53.5.
The S&P’s overall manufacturing PMI fell to 48 over the same period from 49.6, showing continued contraction, while the services PMI rose to 55.2 from 55.
Assessing the PMI surveys, Chris Williamson, chief business economist at S&P Global Market Intelligence, said, ‘The solid growth picture in August points to strong GDP growth of more than 2% year-on-year in the third quarter, which should help ease fears of a near-term recession.’
Similarly, a decline in agricultural price inflation to near pre-pandemic average levels indicates a ‘normalisation’ of inflation and confirms the need to cut interest rates,’ Williamson added.
The US dollar index rose in immediate reaction to the PMI data and was up 0.3% at 101.43 at the time of writing.
This section below was published as a preliminary forecast of S&P’s data on the global index of business activity in the US at 11:00 Moscow time.
S&P’s preliminary global PMIs for August are expected to be little changed from previous readings.
The economic activity surveys are unlikely to influence the Fed’s upcoming decisions.
EUR/USD is forming a long-term uptrend, but a downward correction is not excluded.
On Thursday, S&P Global will release preliminary estimates of the US Purchasing Managers’ Index (PMI) for August. The indices are the result of a survey of senior private sector executives and are designed to reflect the overall health of the economy, providing information on other key economic factors such as GDP, inflation, exports, capacity utilisation, employment and inventories.
S&P Global produces three PMI indices: manufacturing, services and a composite PMI, which is a weighted average of the two sectors. Indicators above 50 indicate economic expansion and below 50, contraction.
Since March 2023, the services sector has remained in expansionary territory, while the manufacturing sector has performed more weakly. The final July data showed the services PMI at 55 and the manufacturing PMI at 49.6.
The US services sector started the second half of the year as it ended the first, posting a notable increase in business activity in July thanks to a rise in new orders. This also encouraged companies to hire additional staff and supported positive expectations for the future. ’, says the official report.