This is good news?
For whatever reason, the business media is celebrating the latest purchasing managers’ index (PMI) readings for August, which were rather disappointing.
The S&P Global Composite PMI weakened to 44.6 last month, down from 47.7 in July.
The S&P Global Services PMI dropped to 43.7, down from 47.3 in the previous month.
Both prints are the lowest since May 2020.
From Trading Economics:
“The decline in service sector activity (43.7 vs 37.3 in July) more than offset the slight growth for US manufacturers (51.5 vs 52.2). Service providers registered a sharp decline in production and the downturn in new orders accelerated to a two-year low, while output and new business also contracted for US factories. Although still rising markedly, the rate of cost inflation softened to the slowest pace since January 2021, as lower demand drove companies to offer concessions to clients. In the meantime, employment growth dropped to January lows for both sectors. Pressure on capacity eased further for private companies as weaker demand cleared backlogs of work for service providers, while that for manufacturers rose marginally.”
The Institute for Supply Management’s (SIM) non-manufacturing PMI surprisingly rose to 56.9 in August. But this is still the lowest it has been since the middle of 2020.
“Based on comments from Business Survey Committee respondents, there are some supply chain, logistics and cost improvements; however, material shortages remain a challenge,” said Anthony Nieves, Chair of the ISM, in a statement.
In addition, the LMI Logistics Managers Index tumbled to 59.7 in September, down from 60.7 in August.
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