Us Business Activity Index Reached 53 Points In June

Us Business Activity Index Reached 53 Points In June by Andrew Blumer last updated on August 21, 2023

US Business Activity Index Reached 53 Points In June

As per the latest data for US business activity, the growth in this regard was one of the slowest in the last 3 months. According to experts, the contraction at the US factories is the reason behind the slow increase in US business activity.

In addition, the Composite Purchasing Managers index from the S& Global only increased by 1.3 points during June. After this increase, the index touched 53 points which is an indication of growth.

In general, any reading above 50 indicates growth, while a reading below 50 is an indication of contraction. In this case, the US business activity is growing but at a much slower pace than what's expected from a big economy like the USA.

The report also shared mixed signals about inflation, as the factory input prices are on the decline while the input prices for service providers are now sitting at a 5-month high. Furthermore, the prices received are now sitting at one of their lowest levels in the last two years!

Services Demand Remain Steady

Although the growth at the factories has deteriorated, the services sector remains strong due to the healthy demand. If we look at the manufacturing gauge, it is now sitting at a 6-month low, which tells us that contraction is just around the corner.

After looking at the data, it becomes clear that the service sector is contributing to most of the growth. This raises the question of whether the services sector is resilient enough to face the rate hikes and manufacturing decline or not!

If we look at Europe, the economic growth came to a standstill during June, with the EU purchasing managers index sliding towards 50.3 (5-month low). In addition, the factories in Germany and France are also struggling, which tells us that it is more of a global economic problem.

It is also important to note that the US manufacturing sector is struggling because of all the rate hikes in the last few years in the USA!