US Services PMI at 51.5%; August 2024 Services ISM Report On Business

Headline data in line with expectations. Overall mixed as Vancarbon pointed out . Prices paid seems like the big story here, coming in hot as the Fed wants to lower rates.

Notables:

Ten industries reported growth, including Arts, Entertainment & Recreation, Transportation & Warehousing, and Health Care & Social Assistance.

The Prices Index rose to 57.3%, up from 57.0% in July, indicating that inflationary pressures remain strong. This increase marks the 87th consecutive month of rising prices, driven by higher material costs in industries like Retail Trade, Utilities, and Transportation & Warehousing.

The New Orders Index shows positive momentum at 53.0%, up slightly from 52.4%. The fact that new orders continue to grow suggests that demand remains stable, particularly in industries like Entertainment and Warehousing, but the pace of growth is slowing, and some industries, such as Construction, are reporting decreases.


While the Employment Index remains in expansion territory at 50.2%, it declined from July's 51.1%. This indicates that while jobs are still being added, the pace of hiring is slowing, which could be a sign of labor market caution or a response to economic uncertainty.


Seven industries reported contraction, such as Agriculture, Forestry, Fishing & Hunting, and Accommodation & Food Services.

The Backlog of Orders Index fell significantly to 43.7%, down by 6.9 percentage points from July. This decline suggests that companies are not seeing enough incoming orders to maintain or grow their backlog, which could signal slowing demand in the near future.

The New Export Orders Index plunged to 50.9%, down from 58.5% in July, indicating weaker demand for U.S. services abroad. This drop is concerning, as it reflects a potential slowdown in international markets.