Economic Buzz: US Private Sector Output Contracts In July

25 Jul 2022 , 09:30 AM

US private sector firms indicated the first contraction in business activity since June 2020 in July, according to latest flash PMI data from S&P Global. The downturn in output signaled a further loss of momentum across the economy of a degree not seen outside of COVID-19 lockdowns since 2009. The downturn was led by a steep drop in service sector activity, though production at manufacturers also fell marginally, down for the first time in over two years. The headline Flash US PMI Composite Output Index registered 47.5 in July, down notably from 52.3 in June to signal a solid contraction in private sector output. Although new orders returned to expansion territory during July, following a contraction in demand during June, the increase was only modest. On the price front, firms continued to highlight marked upticks in input costs at suppliers, as fuel, transportation, raw material and wage expenses rose further. At 47.0 in July, down notably from 52.7 in June, the S&P Global Flash US Services Business Activity Index indicated a solid decline in business activity at service providers. The seasonally adjusted index continued its downward trajectory seen since Marchs recent high and signaled the sharpest fall in output since May 2020. The S&P Global Flash US Manufacturing PMI posted at 52.3 in July, down from 52.7 in June, to signal weak improvements in operating conditions across the US manufacturing sector. A subdued improvement in the health of the goods-producing economy contrasted with marked upturns in April and May. Powered by Commodity Insights