WASHINGTON: Business activity in the U.S. private sector slowed in June, dampening optimism over the American economy, according to preliminary data released on Friday. In a report, market research group ISH Markit said that its flash services purchasing managers’ index (PMI) fell to 53.0 in June, from the prior month’s reading of 53.6. That was a three-month low. Analysts had expected the reading to recover to 53.7. Services make up approximately 80% of the U.S. economy which makes the data key for interpreting growth. Markit also said that its flash manufacturing purchasing managers’ index (PMI) dropped to 52.1 in June from the prior month’s final reading of 52.7. That was a nine-month low. Analysts had expected a slight increase to 53.0.
On the indices, a reading above 50.0 indicates expansion, below indicates contraction. The composite PMI, including activity in both sectors, fell to 53.0 in June from the previous month’s reading of 53.6. Still, the report indicated that new orders left some room to be optimistic over the future as new orders rose at the strongest pace in five months. IHS Markit chief economist Chris Williamson said warned that though growth would likely be higher than in the first quarter, “the relatively subdued PMI readings suggest there are some downside risks to the extent to which GDP will rebound.”
After the report, EUR/USD was trading at 1.1186 from around 1.1182 ahead of the release of the data, GBP/USD was at 1.2714 from 1.2713 earlier, while USD/JPY traded at 111.20 compared to 111.21 before the release. The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.04, compared to 97.08 ahead of the report. Meanwhile, U.S. stocks were trading slightly lower after the open. The Dow 30 fell 45 points or 0.21%, the S&P 500 lost 2 points, or 0.10%, while the tech-heavy Nasdaq Composite traded down 16 points or 0.25%. Elsewhere, in the commodities market, gold futures traded at $1,258.32 a troy ounce, compared to $1,258.42 ahead of the data, while U.S. crude oil changed hands at $42.64, compared to $42.66 earlier.
