The July preliminary US Services Purchasing Managers' Index conducted by Markit came in at 50.9, down from 51.3 in June and below the Investing.com consensus of 52.0. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Here is the opening from the latest press release:
July data suggested that growth in the U.S. service sector remained muted, with activity rising at the weakest pace in the current five-month sequence of expansion. A slower increase in new business was also recorded. On a more positive note, the rate of job creation picked up slightly and business sentiment improved markedly from June’s record low. On the price front, slower increases were registered for both input costs and output prices during the month. [Press Release]
Here is a snapshot of the series since mid-2012.
Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).
The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.
Both series have weakened over the past several months. The interim three-month moving average of the Markit Services index peaked in August of 2014. The ISM index peaked in September of 2015. The two were fairly closely aligned at the beginning of this year, but they have diverged in recent months with the Markit index signaling noticeably weaker growth.