July PMI data signaled another robust expansion in US service sector business activity as upturn softened to the slowest level since Friday.
Source: IHS Markit
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Backlogs of work increased solidly and at the joint-fastest pace since August 2020. The shortage of workers to fill the open positions has hampered efforts to ease the pressures.
Input costs and output charges increased significantly despite their respective inflation rates softening from May’s historic highs.
The adjusted IHS Markit Services PMI was 59.9 at the start of the third quarter, down from 64.6 in June. That was largely in line with the flash estimate of 59.8 in July.
The recent upturn in business activity was marked overall, despite slowing down to a five-month low. Enhanced output was linked to strong demand conditions and a consistent increase in new orders.
New business continued to increase in July, and at the fastest rates since October 2009. The upturn was backed by a pick-up in client demand following vaccinations and easing of Covid-19 restrictions.