With US manufacturing PMI having missed by the most on record last week [3], it was only "fair" that the Services PMI from recent IPO Markit would beat expectations and hold at record highs. At 61.0 this is equal to the best print in history... but there is somethng wrong here. The surge in employment in June has been eviscerated as the index plunged back from record exuberance at 56.1 to 52.8 with some respondents noting "a degree of caution about the business outlook." This is not good news for long-awaited wage inflation that promises to lift all boats...
[4]
And employment tumbled...
[5]
We leave it to a normally exuberant Markit to conclude...
“While a cyclical upswing appears underway across the service sector, the latest survey provides some indication that a smoother ride is not yet fully entrenched. Service providers saw new business gains slip to a three-month low, while payroll growth moderated since June amid a drop in confidence towards the year-ahead business outlook."
