US manufacturing holds steady in June, services PMI declines
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The news: US business activity grew steadily in June, but the overall rate of expansion remains well below the rates seen in late 2024. Dropping exports of goods and services dragged on growth, which was partly offset by stock building by US companies.
The numbers: S&P Global’s headline US PMI came in at 52.8 in June, down from 53.0 in May. While the June rise in output was the third strongest so far this year, the pace of growth remains well below that recorded in late 2024. S&P’s flash June factory PMI held at 52, the highest since February, with figures above 50 indicating growth.
Although service sector output growth cooled slightly to 53.1 from 53.7 the month prior, it remained solid while manufacturing output rose for the first time since February at 51.5.
The context: Despite data indicating that the US economy continued to grow at the end of Q2, Chris Williamson, chief business economist at S&P Global Market Intelligence said that the outlook remains uncertain while inflationary pressures have risen sharply over the past two months.
“While domestic demand has strengthened, notably in manufacturing, to encourage higher employment, this in part reflects a boost from stock building, in turn often linked to concerns over higher prices and supply issues resulting from tariffs,” Williamson said. “Such a boost is likely to unwind in the coming months.”
Meanwhile, data from the National Association of Realtors saw US existing home sales increase unexpectedly in May, climbing 0.8% to a seasonally adjusted rate of 4.03 million units. The month was the weakest May sales pace since 2009. Compared with the year-prior, existing home sales were down 4% on an unadjusted basis.
The sources: S&P Global, National Association of Realtors , Bloomberg, Reuters
