ISM Non-Manufacturing Plummets in July

The ISM non-manufacturing composite index dropped 3.5 points to 53.9 in July, as service sector activity retreated to the lowest point in almost a year. Business activity and new orders posted ominous drops in July.

Summer Doldrums Set in for the Service Sector

• The headline ISM non-manufacturing index retreated to its lowest point since August 2016, as momentum built over the past year dissipated. The details of the July report were less than encouraging, as the largest decline was in the forwardlooking new orders index, which dropped 5.4 points to 55.1.
• Indices fell on the month for every category but inventories, prices and imports, though every index remained above 50. 

… At Least Prices Appear to Have Firmed

• The slowdown in business activity was notable in July, as it was caused by a larger share of firms reporting declining activity. The decline in the hiring gauge was a function of more responses of no change in headcounts on the month. Though, the softer hiring index will still likely be reflected in the payroll report tomorrow.
• The bright spot of the report was the prices paid index, which rose for the second month as fewer respondents saw prices fall.

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