US services sector expands at sluggish pace in July

The US services sector expanded at a sluggish pace last month, albeit faster-than-expected, according to data released on Wednesday.

Markit’s final US business services purchasing managers’ index was unchanged at 51.4 in July, but up from the flash estimate of 50.9, indicating only a very modest expansion. A reading above 50 indicates expansion.

Economists had been expecting a reading of 51.0.

Meanwhile, the seasonally-adjusted Composite PMI Output Index nudged up to 51.8 in July from 51.2 and the flash estimate of 51.5.

Chris Williamson, chief economist at Markit, said: “Those looking for signs of the US economy moving up a gear in the third quarter will be disappointed by the PMI readings for July.

“The surveys are indicating that the pace of economic growth has held at around 1% at the start of the third quarter, largely unchanged on the signals sent by PMIs for the first and second quarters.”