US: S&P Manufacturing PMI drops to 51.3 in August, Composite PMI slumps to 45

• S&P Global Composite PMI for the US continued to decline in August.
• US Dollar Index continues to push lower on weak PMI figures. 

The data published by S&P Global showed on Tuesday that the business activity in the US private sector contracted at a stronger pace in early August than it did in July with the Composite PMI falling to 45 from 47.7. The Manufacturing PMI declined to 51.3 from 52.2 and the Services PMI plunged to 44.1 from 47.3. Both of these readings fell short of market expectations.

Commenting on the data, "August flash PMI data signalled further disconcerting signs for the health of the US private sector. Demand conditions were dampened again, sparked by the impact of interest rate hikes and strong inflationary pressures on customer spending, which weighed on activity," noted  Siân Jones, Senior Economist at S&P Global Market Intelligence.

"One area of reprieve for firms came in the form of a further softening in inflationary pressures," Jones further noted. "Input prices and output charges rose at the slowest rates for a year-and-a-half amid reports that some key component costs had fallen."

Market reaction

The dollar came under heavy bearish pressure after the disappointing PMI surveys and the US Dollar Index was last seen losing 0.45% on the day at 108.46.