US ISM Services Index Jul: 64.1 (est 60.5; prev 60.1) - ATH for ISM Services - Broad strength with supply chain and price issues remaining

  US ISM Services Index Jul: 64.1 (est 60.5; prev 60.1)



July ISM services (larger co's) accelerates strongly, after May's minor retreat, to push to a new high. It was the 14th straight month of growth.  All of the components finished above 50 except for inventories (which is a positive as it means they'll need to be rebuilt), as employment which had fallen below was back above at 53.8.  The deceleration we saw last month in several categories reversed, with all areas increasing other than inventories (-0.7), backlogs (-2.3) and imports (-6.6).  Prices were back above 80.  Full table below. 

All 17 industries came in over 50, and forward-looking sentiment remained very high. All commodities except for fuel, lumber, and PPE increased in price.  Here was the commentary:

Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “The Services PMI® registered another all-time high of 64.1 percent, which is 4 percentage points higher than the June reading of 60.1 and eclipses the previous record of 64 percent in May 2021. The July reading indicates the 14th straight month of growth for the services sector, which has expanded for all but two of the last 138 months.

“The Supplier Deliveries Index registered 72 percent, up 3.5 percentage points from June’s reading of 68.5 percent. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Prices Index registered 82.3 percent, up 2.8 percentage points from the June figure of 79.5 percent and its second-highest reading ever, behind September 2005 (83.5 percent).

“According to the Services PMI®, 17 services industries reported growth. The composite index indicated growth for the 14th consecutive month after a two-month contraction in April and May 2020. The rate of expansion in the services sector recorded another all-time high. The Employment Index reflected growth, even though the constrained labor pool continues to be an issue. Materials shortages, inflation and logistics continue to negatively impact the continuity of supply,” says Nieves.

The 17 services industries reporting growth in July — listed in order — are: Arts, Entertainment & Recreation; Wholesale Trade; Accommodation & Food Services; Management of Companies & Support Services; Retail Trade; Real Estate, Rental & Leasing; Transportation & Warehousing; Information; Other Services; Public Administration; Construction; Health Care & Social Assistance; Utilities; Professional, Scientific & Technical Services; Educational Services; Finance & Insurance; and Mining. No industry reported a decrease in July.

Here at the details:







 Here are the comments.  Again this month all about supply chain and price issues but also more commentary on the solid demand picture.






To see more content, including summaries of some of today's economic reports and my morning and nightly updates go to https://sethiassociates.blogspot.com

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