Xavier von de Gloria
U.S. service sector activity contracted for a second straight month in August as rising inflation and interest rates hit demand, data from a survey of purchasing managers showed Tuesday.
The S&P Global US Services PMI fell to 43.7 in August from 47.3 in July. It fell below a preliminary reading of 44.1, the lowest level since May 2020 when the sector faced initial restrictions to contain his Covid-19 pandemic.
S&P Global said service activity fell on weak domestic and international customer demand, but employment eased and inflationary pressures continued to ease.
Chris Williamson, chief business economist at S&P Global, said: “The U.S. economy plunged into a sharp recession in August, deepening as households and businesses grapple with rising costs of living and tightening fiscal conditions. “It’s a clear indication that the risks are increasing,” he said.
Service providers’ new orders fell for the second month in a row, with firms reporting high inflation and rising interest rates weighed on sales, the report said.A sharp drop in activity was recorded in the financial services sector. the report said.
Employment levels fell and inflationary pressures eased in August, according to survey data. Input price inflation has eased to its lowest level since February 2021, and charge inflation has also softened significantly. Williamson said this would help contain consumer price growth in the coming months, but the rate of increase remains high.
The data showed S&P Global’s US Composite PMI was 44.6 in August, down from 47.7 in July, indicating a sharp contraction in private sector economic activity.
Please contact Xavier Fontdegloria ([email protected]).
(Closed) Dow Jones Newswire
6 September 2022 10:21 ET (14:21 GMT)
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