The U.S. services sector has remained subdued again in June given the data for the month. The activity growth continues to be marginal, while job growth has eased to its one-and-a-half year low. The seasonally adjusted Markit Flash U.S. Services PMI Business Activity Index was unchanged at 51.3 in June from May and was just slightly above the 50 threshold. Hence, the second quarter’s average reading was just a tad firmer than the one seen in the first quarter.
According to survey respondents’ report, June’s activity growth is being weighed on by relatively weak demand. This shows increases uncertainty in the economy and risk aversion amongst clients. The recent data hints at just a slight rise in volumes of new business. However, the growth rate accelerated slightly from the previous month and was the strongest for five months.
Throughout the services economy, the levels of staffing rose in June. But the pace of creation of job slowed for the third consecutive month. It was the slowest since December 2014. Subdued growth in employment partially shows a lack of pressure on operating capacity at service sector companies, noted Markit.
In the mean time, input cost inflation continued to be weak and decelerated to the weakest since March. The output charge inflation continued to be marginal throughout the service sector. It has slowed since May. Service sector firms showed weak sentiment about business activity outlook for one year ahead. The positive confidence degree slowed for the second consecutive month.
Meanwhile, seasonally adjusted Markit Flash U.S. Composite PMI Output Index rose marginally to 51.2 in June from 50.9 in May. June’s index hints at a slight growth in the country’s private sector output. The manufacturing sector and the service economy registered weak growth rates.
