US: ISM Services PMI declines to 52.7 in July vs. 53 expected

• US ISM Services PMI declined modestly in July.
• US Dollar Index stays in positive territory above 102.50.

The economic activity in the US service sector continued to expand in July, albeit at a softer pace than in June, with the ISM Services PMI declining to 52.7 from 53.9. This reading came in below the market expectation of 53.

Further details of the publication revealed that the Employment Index edged lower to 50.7 from 53.1, while the Prices Paid Index climbed to 56.8 from 54.1, pointing into increasing input price pressures.

Commenting on the data, “there has been a slight pullback in the rate of growth for the services sector," said Anthony Nieves, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee.

"This is due mostly to the decrease in the rate of growth for business activity, new orders and employment, as well as ongoing faster delivery times," Nieves further explained. "The majority of respondents are cautiously optimistic about business conditions and the overall economy.”

Market reaction

The US Dollar Index clings to modest daily gains above 102.50 after this report.