US July flash PMI shows private-sector expansion as services rebound, manufacturing eases

U.S. private-sector activity remained in expansion in July as services rebounded sharply and manufacturing growth eased slightly. S&P Global said on July 24 that its preliminary manufacturing PMI came in at 53.8, below the market forecast of 54.4 and just under the previous 53.9 reading. The preliminary services PMI rose to 53.6 from 51.2, comfortably above the market forecast of 51.3 and marking the fastest expansion in services activity so far this year. Stronger output was supported by a larger intake of new work, with businesses citing a pickup tied to FIFA World Cup spending and increased investment in sales, marketing and product development. The survey also pointed to headwinds. Companies said the war in Iran, mainly through higher energy prices, raised operating costs and squeezed consumers' purchasing power, limiting overall activity and leaving employment growth only marginal. Input prices rose to a 14-month high, output inflation climbed to its highest level in nearly four years, and business sentiment nevertheless improved to a one-year high. PMI readings above 50 indicate expansion, while readings below 50 signal contraction. The July figures suggest manufacturing lost a little momentum, but stronger-than-expected services activity helped offset that softness even as inflation risks intensified.