US: Markit Services PMI declines to 59.8 in July vs. 64.8 expected

• US service sector lost growth momentum in July.
• US Dollar Index continues to move sideways around 93.00.

The economic activity in the US services sector continued to expand in July, albeit at a softer pace than it did in June, with the Markit Services PMI declining to 59.8 (preliminary) from 64.6. This reading missed the market expectation of 64.8.

Key takeaways from the press release

“Where a loss of growth momentum was noted, firms linked this to labour shortages and difficulties acquiring stock.”

“Service providers indicated a robust uptick in cost burdens during July, amid hikes in supplier prices and a greater need to hire additional workers.”

“The pace of charge inflation remained substantial as firms sought to pass on higher costs to clients.”

“Amid labour shortages and pressure on capacity, firms noted the lowest degree of optimism since February.”

Market reaction

This report doesn’t seem to be having a significant impact on the greenback’s performance against its rivals. As of writing, the US Dollar Index was up 0.12% on the day at 92.94.