US Composite PMI Hits 54.8 in June 2024: Fastest Business Growth Since April 2022

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US Composite PMI Rises to 54.8 in June 2024, Marking Fastest Growth Since April 2022

Team FS

03/Jul/2024

Key Points:

US Composite PMI for June 2024 revised upwards to 54.8, marking the fastest business activity growth since April 2022.

Service sector activity expanded at a PMI of 55.3, outpacing manufacturing which recorded a PMI of 51.6.

New orders increased for the second consecutive month, reaching the highest level in a year, with companies responding by increasing staffing levels.

The S&P Global US Composite PMI for June 2024 was revised upwards to 54.8, showing a positive trend from the initial estimate of 54.6 and an improvement from May's 54.5. This marks the fastest growth in business activity since April 2022, indicating a robust recovery and strong economic performance.

The growth in business activity was primarily driven by the service sector, which saw its PMI rise to 55.3, compared to the manufacturing sector's PMI of 51.6. This disparity highlights the faster expansion in the services sector relative to manufacturing. The increase in output was fueled by a boost in new orders, which grew for the second consecutive month and reached the highest level in a year. Despite a decrease in new export orders, the overall new business experienced a rise, reflecting strong domestic demand.

In response to the higher demand, companies increased their staffing levels for the first time in three months, underscoring the positive outlook and the need to boost capacity. This increase in employment is a positive sign for the labor market and indicates that businesses are confident in sustained demand.

On the price front, input cost and output price inflation rates slightly eased from the previous month, suggesting that cost pressures are beginning to moderate. This easing of inflation is a welcome development, as it may help to balance the overall economic growth and inflation dynamics.

Looking ahead, firms remained optimistic about future output growth, with confidence levels little changed from the previous month. This sustained optimism reflects the ongoing recovery and the positive business sentiment across various sectors.

The rise in the US Composite PMI to 54.8 highlights the strong performance of the US economy, driven by robust growth in the services sector and a steady increase in new orders. The upward revision from the initial estimate also indicates that economic conditions are improving at a faster pace than previously anticipated.

The strong performance of the services sector, with its PMI at 55.3, outpacing the manufacturing sector (PMI 51.6), underscores the critical role of services in driving overall economic growth. The boost in new orders and the increase in staffing levels are positive indicators of sustained economic momentum.

The overall rise in business activity, coupled with the easing of inflationary pressures, presents a balanced economic outlook. Companies' optimistic outlook for future growth further supports the positive sentiment and indicates a continued recovery in the coming months.

In summary, the US Composite PMI for June 2024 was revised upwards to 54.8, marking the fastest growth in business activity since April 2022. The strong performance was driven by a robust services sector, an increase in new orders, and higher staffing levels. The easing of input cost and output price inflation rates adds a positive note to the economic outlook, with firms maintaining optimism about future growth. This overall positive trend highlights the resilience and strength of the US economy as it continues to recover and grow.

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US Composite PMI Rises to 54.8 in June 2024, Marking Fastest Growth Since April 2022

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