US services activity growth slows to five month low in June

FXStreet (Mumbai) – The final Markit US Services Business Activity Index printed at 54.8 in June, down from 56.2 in May. The index was only slightly below the average seen since the survey began in late-2009 (55.8).

The composite PMI posted 54.6 in June, down from 56.0 in May and the lowest reading since January. As per the Markit report, the latest data indicated a robust and accelerated expansion of incoming new business. The rate of employment growth moderated for the first time in 2015 to date and was the weakest since March.

Input price inflation rose at a fastest pace since October 2013 and the output prices rose at a second-fastest rate since September 2014.

As per Chris Williamson, Chief Economist at Markit, “The loss of growth momentum seen in the surveys means GDP growth could slacken off again in the third quarter and hiring could likewise ease off. “Fed talk will most likely continue to prepare the ground for rate hikes later this year, but policymakers will want to see firmer evidence that the economy retains healthy growth momentum before taking the plunge and hiking interest rates, especially given ongoing disappointing pay growth and benign inflation.”

The final Markit US Services Business Activity Index printed at 54.8 in June, down from 56.2 in May. The index was only slightly below the average seen since the survey began in late-2009 (55.8).

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