Despite an excited bounce in US Manufacturing PMI's preliminary print (and ISM Services last month), Markit reports a disappointing drop in US Services to a 5-month low. New business slowed but that did not deter hope as business confidence rebounded (albeit from record lows). However, as Markit notes, "The U.S. service sector remained stuck in a low gear at the start of the third quarter of 2016..."
Commenting on the flash PMI data, Andrew Harker, Senior Economist at Markit said:
“The U.S. service sector remained stuck in a low gear at the start of the third quarter of 2016, with growth of activity remaining subdued amid a slower rise in new business. This is particularly disappointing given the decent numbers posted by the manufacturing sector last week.
“A bit more encouraging was the rebound in business confidence following June’s survey low, suggesting that a return to stronger growth will be possible once the current soft patch comes to an end. Whether this will be before the presidential election or not remains to be seen, however.”
The composite (Services and Manufacturing) PMI rose modestly but suggests very marginal growth in Q3...