U.S. Economy Weakens in August as Stagnation Rears Head, PMIs Suggest
By Ed Frankl
Business activity in the U.S. rose at a weaker pace in August, as activity teetered near stagnation across the private sector, according to a purchasing managers' survey published Wednesday.
The S&P Global Flash Composite Output Index--which gauges activity in the manufacturing and services sectors--fell to 50.4 in August from 52.0 in July, the lowest rate in six months.
The reading suggests that U.S. economic output is expanding, albeit only marginally, coming in just above the 50 no-change mark.
"A near-stalling of business activity in August raises doubts over the strength of U.S. economic growth in the third quarter," Chris Williamson, chief business economist at S&P Global Market Intelligence said.
In addition, demand is looking increasingly lethargic in the face of high prices and rising interest rates, he said.
While services had led acceleration of growth in the second quarter of the year, that effect has now faded, together with a further drop in factory output, Williamson added.
Manufacturing slipped further into contraction territory, according to the PMI, coming in at 47.0, compared with 49.0 in July. It also missed expectations of 49.0 in a consensus forecast from economists polled by The Wall Street Journal.
Meanwhile, the flash services PMI slowed further to 51.0 in August from 52.3 last month, its lowest level since February and missing expectations that it would rise slightly to 52.5.
Rising wages, alongside increased energy prices, also are pushing input-cost inflation up, which will raise concerns prices will stay higher for longer, Williamson said.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
August 23, 2023 10:21 ET (14:21 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
Never Mind Market Efficiency: Are the Markets Sensible?
-
Starbucks Stock Could Use a Pick-Me-Up After Big Selloff; Is it a Buy?
-
5 Cheap Stocks to Buy From an Attractive Part of the Market
-
Markets Brief: All Eyes On Inflation
-
5 Things We Learned From the Q1 Earnings Season
-
After Earnings, Is Palantir Stock a Buy, a Sell, or Fairly Valued?
-
What’s Happening In the Markets This Week
-
Can the Fed Declare Victory on Inflation?
-
Tariffs On Chinese EVs Offer US Automakers a Chance to Capture Demand
-
The Best REITs to Buy
-
3 Hot Stocks to Buy That Still Look Undervalued
-
After Earnings, Is Eli Lilly Stock a Buy, a Sell, or Fairly Valued?
-
Today’s Market Volatility Could Provide Tomorrow’s Opportunities
-
40 of the Best Investment Picks
-
Tech Stock Dividends Are Changing the Face of Dividend Growth Investing
-
Roblox Earnings: Weakening Engagement Has Weighed On Growth