Business activity in the US services sector fell in July for the first time in two years, according to the latest S&P Global PMI data.
In particular, the final PMI for business activity in services fell to 47.3 in July, beating the initial reading of 47.0, but well below June’s reading of 52.7.
Readings below 50 points indicate a contraction in activity.
The index also completed four consecutive months of decline. The decline in business activity was the first since June 2020.
The composite PMI for manufacturing, which combines manufacturing and services, fell to 47.7 from 52.3 in June, a sign that private sector activity is contracting. The decline in production was the first since June 2020.
“Economic conditions worsened significantly in July, with business activity easing in manufacturing and services,” commented Chris Williamson, chief economist at S&P Global Market Intelligence.
The ISM reading recorded an unexpected rise
A completely opposite picture emerges from the corresponding survey of the Institute for Supply Management, with the services sector appearing strengthened in July.
In particular, the ISM announced that the non-manufacturing PMI index rebounded to 56.7 points last month from 55.3 points in June, ending a streak of three consecutive months of slowdown.
The ISM reading at the same time defied the estimates of analysts who expected the index to fall to 53.5 points according to a Reuters poll