U.S. service sector firms record solid growth in business activity in August, flash PMI index drops to 55.2

Service sector companies in the U.S. saw another strong growth in business activity in August; however, the pace of growth eased to a four-month low. The seasonally adjusted IHS Markit flash Services PMI Business Activity Index dropped to 55.2 from July’s 56.

New business volumes rose at the most decelerating rate witnessed in 2018; however, the pace of growth was consistent with the average since the survey started in 2009. Softer growth in client spending added to a sustained drop in backlogs of work, with the latest fall the greatest since March 2017. Furthermore, service providers hinted at the least marked rise in payroll figures for eight months.

Input cost inflation eased in August and was below the average witnessed in the first half of 2018. Nevertheless, prices charged by service sectors companies continued to rise at one of the most rapid rates seen in the past four years, reflecting attempts to ease pressures on operating margins.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 93.9122. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex