IHS Markit U.S. Services PMI Slightly Below Estimates in June

The seasonally adjusted final IHS Markit U.S. Services Purchasing Managers’ Index (PMI) Business Activity Index registered 64.6 in June, down from 70.4 in May, data showed on Tuesday.

The reading comes slightly below the earlier flash estimate of 64.8, according to IHS Markit.

The latest expansion in output was the third-fastest since data collection began in October 2009, only slower than recent upturns in May and April, respectively.

However, data continued to show a substantial rise in client demand, with business confidence in the outlook also improving to the second-highest level in about seven years.

“Rates of output and new order growth eased from May’s record highs, however, and capacity constraints meant backlogs of work grew at the quickest rate for ten months.”

“Although firms continued to hire new workers, challenges finding suitable candidates weighed on the pace of job creation.”

“Meanwhile, input prices increased at the second-fastest rate on record as supplier price hikes and greater wage bills pushed up cost burdens. Nonetheless, accommodative demand conditions allowed firms to partially pass on higher costs to clients.”