Prior month manufacturing PMI 53.9 Prior month services PMI 51.2.Prior month composite PMI 51.9Flash manufacturing PMI for July 53.8 versus 54.3 expected. This is a 4-month low but remains above the 50 level. Flash services PMI for July 53.6 versus 51.5 expected. Strongest since November 2025Flash composite PMI for July 53.6 versus 51.9 last month. Strongest since November 2025
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence:
“US businesses reported a good start to the third
quarter, the ‘flash’ PMI survey data broadly consistent
with GDP growing at an annualized 2.0% against a 1.2%
pace signalled for the second quarter. The month saw
an encouraging return to hiring by companies, with
employment rising for the first time in three months.
However, some of this improvement may prove shortlived as July saw hospitality spend boosted by the FIFA
World Cup and USA 250 anniversary activities. It was also
worrying – though not unexpected – to see manufacturing
growth weaken as some of the stock building seen in
prior months showed signs of fading. Instead, July saw
a concerning intensification of supply chain delays
and accompanying renewed upturn in price pressures,
constraining growth and subduing demand.
Events over recent days in the Middle East will have only
further exacerbated these supply chain and price worries
and raise downside risks to the near-term outlook for the
economy, hinting that July’s upturn may not be the start
of an improving trend.”
Details from S&P global:
Future Sentiment
Business confidence improved to an 8-month high overall.
Services optimism climbed to its strongest level since September, helped by lower energy prices and improving consumer spending prospects.
Manufacturing confidence slipped to its weakest since October, weighed down by:
Softening demand
Global trade concerns
Tariffs
Geopolitical uncertainty
Elevated costs
Employment
Employment increased only slightly after two months of declines.
Hiring remained cautious in both manufacturing and services.
High costs and trade uncertainty limited hiring, with many firms choosing not to replace departing workers.
Some businesses continued to report labor shortages.
Supply Chains
Supply chain disruptions worsened further.
Manufacturing supplier delivery times lengthened at the fastest pace since August 2022.
Delivery delays have now deteriorated for 11 consecutive months.
Major drivers:
Shipping disruptions around the Strait of Hormuz
Stockpiling of inventory
Tariff-related supply constraints
Inflation & Prices
Input cost inflation accelerated to its highest level since May 2025.
Higher costs reflected:
Elevated energy prices
Higher shipping costs
Tariffs
Broad-based supplier price increases
Businesses passed more of those costs on to customers.
Overall selling price inflation reached its highest since August 2022.
Services price inflation climbed to its highest level in nearly four years, while manufacturing price inflation remained elevated but eased somewhat.
This article was written by Greg Michalowski at investinglive.com.