US Composite PMI Slows With "Steepest Rise In Prices On Record"

A mixed bag for Markit PMIs (Services miss, Manufacturing beat) left the Composite index lower (confirming Europe's slowdown).

  • Markit PMI- July Manufacturing printed 55.5, marginally higher than the 55.4 in June (and above 55.1 expectations)

  • Markit PMI- July Services printed 56.2, marginally lower than the 56.5 in June (and below 56.3 expectations)

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The July survey data indicate that the US economy sustained strong growth momentum after what looks to have been a solid second quarter, representing a good start to the second half of 2018. Although down from June, the July flash PMI is in line with the average for the second quarter and indicative of the economy growing at an annualised rate of approximately 3%.

“Buoyant domestic demand helped the service sector maintain particularly impressive growth and has helped cushion the goods producing sector from wilting demand in export markets, with goods export orders down for a second successive month in July.

But it is trade wars that are worrying most...

In response to higher business expenses, private sector firms recorded a sharp and accelerated rise in their average prices charged. The overall rate of  output price inflation was the fastest since this index began almost nine years ago. 

“Trade frictions have clearly become a major cause of concern, especially among manufacturers. Firms have become increasingly worried about the impact of tariff and trade wars on demand, prices and supply chains.

July saw the steepest rise in prices charged for goods and services yet recorded by the surveys as firms passed rising costs on to customers, in turn frequently linked to tariffs.

What’s more, supply chain delays also hit a record high amid rising shortages of key inputs, which is usually a harbinger of further price rises.”

US and Eurozone both saw PMI composite slow in July...

It would appear that tariffs "are not the greatest" to many of the survey respondents.