US: ISM Services PMI declines to 55.3 in June vs. 54.5 expected

• ISM Services PMI edged lower in June, came in better than market expectation.
• US Dollar Index trades at its highest level in nearly two decades above 107.00.

The ISM Services PMI in June declined to 55.3 from 55.9 in May, showing that the business activity in the service sector expanded at a slightly softer pace. This print, however, came in better than the market expectation of 54.5.

The New Orders component of the survey fell to 55.6 from 57.6 and the Employment component slumped to 47.4, pointing to a contraction in service sector employment.

Assessing the findings of the survey, "the slight slowdown in services sector growth was due to a decline in new orders and employment," noted Anthony Nieves, Chair of the Institute for Supply Management Services Business Survey Committee. "Logistical challenges, a restricted labor pool, material shortages, inflation, the coronavirus pandemic and the war in Ukraine continue to negatively impact the services sector."

Market reaction

The US Dollar Index regained its traction after this report and was last seen rising 0.67% on the day at 107.20.