August's preliminary Services PMI was slighlty better than expected but dipped from 55.7 to 55.2 - back towards the lowest levels of 2015. Under the surface things do not look great with New Business Volumes at their weakest since January amd Prices Charged tumbling to the lowest level since June 2013. As Markit notes, "underlying momentum within the U.S. economy had shifted down a gear even before the recent global market turmoil and escalating worries about China’s growth outlook gathered on the horizon."
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“August data signals a renewed slowdown in U.S. service sector growth, and this comes hot on the heels of a 22-month low recorded by the latest flash Manufacturing PMI survey. Moreover, service providers’ new business volumes expanded at the slowest pace since January, suggesting that underlying momentum within the U.S. economy had shifted down a gear even before the recent global market turmoil and escalating worries about China’s growth outlook gathered on the horizon.
“Job creation nonetheless continued at a solid pace in August, which marked five-and-half years of sustained employment growth across the service economy. Meanwhile, the latest survey highlighted a further slowdown in input cost inflation, as falling fuel prices continued to alleviate pressures on cost burdens. Average prices charged by service sector firms were broadly unchanged in August, thereby ending a 25-month period of rising output prices.”
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