U.S. business activity growth eases to 40-month low in June
data released by IHS Markit on Friday indicated that the U.S. private sector
growth in June expanded at the weakest pace for over three years.
According to the report, the Markit flash manufacturing purchasing manager's index (PMI) stood at 50.1 in June down from 50.5 in May. The latest reading pointed to the weakest rate of expansion in the manufacturing sector since September 2009.
Economists had expected the reading to edge down to at 50.4.
A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction.
According to the report, weaker rates of production growth and employment were the key factors weighing on the headline PMI, alongside the largest decline in stocks of purchases for almost a decade.
Meanwhile, the Markit flash services purchasing manager's index (PMI) decreased to 50.7 this month, down from 50.9 in the prior month. The reading indicated the slowest increase is services sector since the current upturn began in March 2016.
Economists had expected the reading to increase to 51.0.
Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 50.6 in June, down from 50.9 in the previous month, indicating the slowest expansion in overall business activity since February 2016.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit noted, “Business activity edged closer to stagnation in June, expanding at the slowest rate since February 2016 and rounding off a second quarter in which the survey data point to the pace of economic expansion slipping to 1.4%.”
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