Input Stories

The services sector grew more than anticipated in July (MarketWatch).

What’s going on: The Institute for Supply Management’s U.S. services index “jumped to 51.4% last month from 48.8% in June. The June reading was the lowest since May 2020—during the height of the COVID-19 pandemic.”

• Readings above 50% indicate economic expansion. Economists polled by The Wall Street Journal had forecast a 50.9% reading for July.
• The data arrives just days after the ISM’s manufacturing index for July came in at an eight-month low and nonfarm hiring for the same period showed slowing (manufacturing employment, however, was little changed from June to July).

The details: The index for new orders rose 5.1 points to 52.4%, and the production gauge increased 4.9 points to 54.5%.

• The employment barometer went up five points to 51.1%, ending a five-month-long run of negative readings and hitting the highest level since last fall.

What it means: “The ISM’s report doesn’t carry the importance of official jobs or inflation data, but is still closely watched on Wall Street as a leading economic indicator. … The report could temper some of the pessimism that has swept through markets since Friday’s disappointing nonfarm payrolls report.” (The Wall Street Journal, subscription).