Manufacturing PMI Data Corrected: Now at a 6-Month Low
The S&P Global “flash” U.S. manufacturing sector index slid to a six-month low of 46.3 in June from 48.4 in May. The corrected data shows that manufacturing PMI fell to a lower point than previously reported.
Service Sector Activity Index Also Drops
The S&P Global “flash” U.S. service sector activity index decreased to a 54.1 in June from 54.9 in the prior month, marking a two-month low. Nevertheless, new orders in the services sector continued to increase at a strong rate.
Manufacturers Face Fastest Contraction in New Orders Since December
Conversely, manufacturers recorded the fastest rate of contraction in new orders since last December. The overall rate of selling prices for goods and services dropped to the lowest level since late 2020.
Looking Ahead at the Health of the Economy
The S&P PMIs are used as indicators to predict economic health, which is currently unclear even for Federal Reserve officials. A composite output index from S&P showed the fifth straight month of increases in private sector activity. “US [activity] remained robust in June, consistent with GDP rising at a rate of 1.7% to put second quarter growth in the region of 2%,” said Chris Williamson, chief business economist at S&P Global.