The US July PMI Data Remains Stable, But the Report Hides a Warning Signal

August 3rd, Chief Business Economist at S&P Global Market Intelligence Chris Williamson stated: "Despite the stable PMI figures released in the US in July, survey data indicate some warning signs about the future growth trajectory. The production growth rate in July slowed significantly, which is related to the third consecutive month of weak growth in new business, reflecting a reduction in inventory backlog following unusually strong precautionary inventory building in the second quarter."

Furthermore, supply chain delays worsened, exports declined, and customer reluctance to accept higher prices added further pressure. Although raw material cost inflation has eased slightly, inflationary pressures remain high due to persistent energy prices and tariffs.

In response, manufacturers are either trying to raise prices to protect margins or striving to improve production efficiency, resulting in a continued high factory gate price inflation rate in July, while employment growth has also slowed. In the current environment, business optimism about economic growth prospects has fallen to its lowest level since October last year, highlighting the downside risks in the near term."