Amazing how we all look at the same data but still come to different conclusions

The August US composite PMI fell to 50.4 from 52 and that’s the weakest since February. Manufacturing fell to 47 from 49 and services were down by 1.3 pts m/o/m to 51. Unlike the ISM services index, this services component does not include ag, mining, utilities, construction, wholesale trade and retail.

The slip in services was due to “high interest rates and inflationary pressures” weighing on consumer spending. Yes, the cumulative impact of the past few years of inflation should not be forgotten in the focus on rate of change. New orders fell to the lowest since January. Employment was little changed in August and they said “A lack of new business and some instances of difficulties retaining staff dragged on jobs growth.” Price pressures picked up in response to higher wage and fuel bills but for both manufacturers and services, “Efforts to remain competitive and drive sales stifled the pace of selling price inflation, however, which softened from that seen in July.” Not good for profit margins.

With manufacturing, new orders fell further and “Muted demand from key export markets, especially Europe, led to a renewed decrease in new export orders in August. The fall in foreign client demand extends the trend of contraction seen since June 2022 which was only broken briefly by a marginal expansion in July.” Inventories were down again.