(Kitco News) – The U.S. service sector improved above expectations last month, according to the latest data from the Institute for Supply Management (ISM).
The ISM announced on Thursday morning that its Services Purchasing Managers Index came in at 55.4 in August, up from 54.1 in July. The data was better than expected, as economists were looking for a reading of 54.3.
Readings above 50 in such diffusion indexes signify economic growth and vice versa. The farther an indicator is above or below 50, the greater or smaller the rate of change.
Spot gold was rising once again after coming off the session high of $4,496.01 set around 9 am ET, and last traded at $4,463.57 per ounce for a gain of 1.72% on the daily chart.
“In August, the Services PMI registered 55.4 percent, an increase of 1.3 percentage points compared to July’s figure of 54.1 percent,” said Steve Miller, Chair of the ISM Services Business Survey Committee. “The Business Activity Index remained in expansion territory in August, increasing 2.6 percentage points to 61.7 percent from July’s reading of 59.1 percent. The New Orders Index registered 60.9 percent, 3.7 percentage points above July’s figure of 57.2 percent. The Employment Index contracted for a second straight month with a reading of 47.8 percent, a 0.4-percentage point increase from the 47.4 percent recorded in July.”
The Supplier Deliveries Index was at 51.3 percent, 1.5 percentage points lower than the 52.8 percent recorded in July. “This is the 21st consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance,” he said.
“The Prices Index registered above 70 percent for the fifth time in six months; the reading of 72.6 percent in August is 2.3 percentage points above July’s figure of 70.3 percent,” Miller noted. “The index has exceeded 60 percent for 21 straight months, with its 12-month average increasing by 0.4 percentage point to 68.5 percent, the highest since April 2023.”
“Twelve industries indicated growth in August, one fewer than the previous month, while five reported contraction, up one compared to July. The August Services PMI® reading of 55.4 percent is 1.7 percentage points above the 12-month average of 53.7 percent. The uptick of 0.3 percentage point over July’s 12-month average of 53.4 percent marks the eighth straight month that figure has increased.”
“Tariffs and the Middle East conflict returned as the most cited issues impacting respondents’ supply chains,” he said. “As a potentially positive sign for employment, there was a slight reduction in the share of companies cutting staff levels, down from 19 percent in July to 17.1 percent in August.”
The ISM said 12 industries reported growth in August, one fewer than in July, while five reported contraction, an increase of one from July.
