The U.S. services sector either expanded or shrank faster in August than in July, according to two separate business surveys, adding to other mixed signals of the U.S. economy’s strength in recent months.
The Institute for Supply Management on Tuesday said the nation’s services sector grew faster in August than in July, according to its Services PMI—an index that tracks industries including healthcare, finance, agriculture and construction.
Separately, data firm S&P Global said on Tuesday the services sector shrank faster in August than in July due to weak demand, according to Services PMI Business Activity Index.
Both indexes are derived from surveys of companies. Readings above 50 indicate an overall expansion in activity, while those below 50 indicate a contraction.
The ISM index reading came in at 56.9 in August, up from 56.7 in July.
The S&P Global index registered 43.7 in August, indicating the sharpest pace of contraction since May 2020, down from 47.3 in July.
Representatives for the two surveys said their results accurately portrayed current business conditions, though they differ in methodology and sometimes conclusions. For their services indexes, the ISM polls company purchasing managers, while S&P Global also surveys other executives. The ISM surveys a larger set of industries—including construction, mining, utilities and government—that the S&P survey excludes.
“We are seeing a broad-based slowdown in the economy,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Anthony Nieves,
chairman of ISM’s services business survey committee, said companies reported increased hiring and slowing inflation.
“It’s painted as gloom and doom out there and yet the economy seems to be doing pretty good right now,” he said in an interview.
The differing results add to others signs that the U.S. economy is going through a bumpy transition this year, amid high inflation and rising interest rates.
U.S. gross domestic product declined in the first half of the year, according to the Commerce Department. And consumer spending rose by a slight 0.1% in July from a month earlier, the Commerce Department said, a sharp slowdown from June, when spending increased 1%.
Meanwhile, however, the U.S. labor market has remained strong this year, while cooling a bit in August. Employers added a robust 315,000 jobs in August, down from 526,000 jobs in July, the Labor Department said on Friday. Wage growth also slowed. The unemployment rate rose to 3.7% in August from a half-century low of 3.5% the prior month as more Americans entered the workforce.
The Federal Reserve is raising interest rates to try to tame high inflation by moderating hiring, spending and investment. Officials remain on track to raise their benchmark rate by either 0.5 or 0.75 percentage point at their meeting later this month.
ISM reported that services providers reported their new orders, employment and business activity all grew in August. The fastest-growing sectors were mining, real estate, utilities and construction.
S&P Global found that all seven of the sectors it surveyed showed contractions in business activity, with the declines led by financials, healthcare and consumer services.
Write to Austen Hufford at austen.hufford@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
The U.S. services sector either expanded or shrank faster in August than in July, according to two separate business surveys, adding to other mixed signals of the U.S. economy’s strength in recent months.
The Institute for Supply Management on Tuesday said the nation’s services sector grew faster in August than in July, according to its Services PMI—an index that tracks industries including healthcare, finance, agriculture and construction.
Separately, data firm S&P Global said on Tuesday the services sector shrank faster in August than in July due to weak demand, according to Services PMI Business Activity Index.
Both indexes are derived from surveys of companies. Readings above 50 indicate an overall expansion in activity, while those below 50 indicate a contraction.
The ISM index reading came in at 56.9 in August, up from 56.7 in July.
The S&P Global index registered 43.7 in August, indicating the sharpest pace of contraction since May 2020, down from 47.3 in July.
Representatives for the two surveys said their results accurately portrayed current business conditions, though they differ in methodology and sometimes conclusions. For their services indexes, the ISM polls company purchasing managers, while S&P Global also surveys other executives. The ISM surveys a larger set of industries—including construction, mining, utilities and government—that the S&P survey excludes.
“We are seeing a broad-based slowdown in the economy,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Anthony Nieves,
chairman of ISM’s services business survey committee, said companies reported increased hiring and slowing inflation.
“It’s painted as gloom and doom out there and yet the economy seems to be doing pretty good right now,” he said in an interview.
The differing results add to others signs that the U.S. economy is going through a bumpy transition this year, amid high inflation and rising interest rates.
U.S. gross domestic product declined in the first half of the year, according to the Commerce Department. And consumer spending rose by a slight 0.1% in July from a month earlier, the Commerce Department said, a sharp slowdown from June, when spending increased 1%.
Meanwhile, however, the U.S. labor market has remained strong this year, while cooling a bit in August. Employers added a robust 315,000 jobs in August, down from 526,000 jobs in July, the Labor Department said on Friday. Wage growth also slowed. The unemployment rate rose to 3.7% in August from a half-century low of 3.5% the prior month as more Americans entered the workforce.
The Federal Reserve is raising interest rates to try to tame high inflation by moderating hiring, spending and investment. Officials remain on track to raise their benchmark rate by either 0.5 or 0.75 percentage point at their meeting later this month.
ISM reported that services providers reported their new orders, employment and business activity all grew in August. The fastest-growing sectors were mining, real estate, utilities and construction.
S&P Global found that all seven of the sectors it surveyed showed contractions in business activity, with the declines led by financials, healthcare and consumer services.
Write to Austen Hufford at austen.hufford@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8