United States: Composite PMI records worst reading since May 2020 in August
August 23, 2022
The S&P Global Flash Composite Purchasing Managers' Index (PMI) came in at 45.0 in August, down from July's 47.7. August's result marked the worst performance since May 2020. As such, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in business conditions in the private sector compared to the previous month.
Meanwhile, the Manufacturing PMI came in at 51.3 in August, down from July’s 52.2. Lastly, the services PMI activity index fell to 44.1 in August (July: 47.3). In the private sector as a whole, output, new orders and new export orders declined, with firms blaming material shortages, delivery delays, higher interest rates and still-elevated price pressures. More positively, input cost inflation eased for the third straight month, while pressure on supply chains showed signs of easing and business sentiment improved.
Commenting on the result, the EIU said:
“We have been expecting to see a slowdown in consumer spending growth around August-September, once pent-up demand left over from the pandemic was worked through and high inflation and interest rates started to affect consumers. The August PMI contraction fits with that view.”
Author: Oliver Reynolds, Economist