U.S. August Preliminary IHS Markit Composite Index Falls
(Bloomberg) -- The seasonally adjusted preliminary IHS Markit U.S. Composite Purchasing Managers’ Index fell to 55 in August - - a four-month low. Services also fell to a four-month low at 55.2, while manufacturing dipped to the lowest level since last fall. Data was collected Aug. 13-22.
Despite input price inflation easing for a third consecutive month, Chris Williamson, chief business economist at IHS Markit said the survey “found increased cases of companies reporting the need to cut costs, in part reflecting the recent steep rise in raw material prices, often linked to tariffs and shortage- related price hikes.”
The increasingly cautious viewpoint among firms can be seen in the composite new orders index which fell to the lowest level this year and in the composite employment index which fell to a 15-month low. Friction between pressure to boost wages and the desire to reduce operating expenses was cited as the main reason respondents were cautious in their hiring strategies.
In the service sector, client spending was weak as the outstanding business index contracted for the second month in a row to an 18-month low.
The headline manufacturing index fell to 54.5 in August, down from 55.3 in July and the lowest reading since November. Survey respondents said the rise in demand for domestically sourced goods is causing capacity constraints and supply-chain turmoil with manufacturers.
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