Economic activity in US services sector drops last month, 2nd fall in last 3 months
(MENAFN) According to a report released Wednesday by the Institute for supply Management (ISM), economic activity in the US services sector experienced a decline in June, marking the second contraction in the last three months. The ISM's non-manufacturing Purchasing Managers’ Index (PMI), a key indicator known as the ISM services PMI, registered at 48.8 percent. This figure represents a notable decrease of five percentage points from May's reading of 53.8 percent and fell below market expectations of 52.6 percent.
A reading below 50 percent on the PMI scale indicates contraction in the services sector, which encompasses a wide range of industries crucial to the US economy. The downturn in June follows a pattern observed in May, where the services sector contracted for the third time in the past 49 months, and previous contractions were noted in April 2024 and December 2022.
Steve Miller, Chair of ISM, highlighted that survey respondents noted stagnant or declining business conditions, attributing the economic slowdown to persistent challenges. He noted, "Although inflation pressures are easing somewhat, certain commodities continue to experience significant cost increases," underscoring ongoing concerns about inflationary pressures impacting business operations and consumer spending.
The latest ISM report paints a cautious picture of the US economic landscape, emphasizing the impact of fluctuating business conditions and inflationary pressures on service-oriented industries. As economic indicators fluctuate, policymakers and businesses will continue to monitor these trends closely to gauge the trajectory of economic recovery and potential policy responses.
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