That’s why this week, the U.S. economic landscape is abuzz with excitement over the ISM Services PMI report. This report follows last Friday’s surprise plunge in payrolls. Traders and investors have been looking forward to this key leading indicator. Forecasters expect it to show a sizable contraction in the services sector and growing economy in July.
In recent months, the ISM Services PMI report has indicated a troubling trend: weak employment activity coupled with elevated price pressures. This litany of problems has sent alarm bells ringing among economists about the overall state of the U.S. economy. The next report will be very historic. Additionally, it serves as an important political litmus test for judging economic success.
The ISM Services PMI report is an important source of highly detailed, timely information, opinion and analysis on the services industry. This sector has displayed incredible strength, despite ongoing, larger economic headwinds. At the same time, analysts do expect the new numbers to reflect at least some growth. Read more as they dig deep first into employment trends, then into inflationary pressures, and more key indicators.
We’ve found that weak employment activity has been a consistent culprit in historically lackluster ISM Services PMI reports. This ongoing trend presents serious cause for concern regarding labor market stability and what it might mean for future consumer spending. Elsewhere, elevated price pressures continue to be a worry, fueling conversation over inflation and the need for the Fed to adjust course on monetary policy.
Given what the market is expecting this report to show, the effect on the U.S. dollar is another highly-important factor to watch. Traders watch these types of economic indicators like a hawk, because they have the potential to drastically change currency valuations and trading positions. As financial markets overall are now under greater volatility, any major surprise from expectations will certainly result in likely immediate and swift reactions in currency trading.
The ISM Services PMI report is a needle-moving economic release. It’s a really important event full of deep dives into the larger dynamics at play in the U.S. economy. The full findings will be crucial for policymakers, businesses, and investors to better understand our new, uncertain economic reality.