S&P Global US Manufacturing PMI flash 49.5 versus 52.7 estimate | investingLive

Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence commented:

“The flash PMI data indicated that the US economy
grew at a sharply increased rate at the start of the third
quarter, consistent with the economy expanding at a 2.3%
annualized rate. That represents a marked improvement
on the 1.3% rate signalled by the survey for the second
quarter.
“Whether this growth can be sustained is by no means
assured. Growth was worryingly uneven and overly reliant
on the services economy as manufacturing business
conditions deteriorated for the first time this year, the
latter linked to a fading boost from tariff front-running.

“Business confidence about the year ahead has also
deteriorated in both manufacturing and services to one of
the lowest levels seen over the past two-and-a-half years.
Companies cite ongoing concerns over the impact of
government policies, notably in terms of both tariffs and
cuts to federal spending.
“Inflation pressures have meanwhile intensified.
Companies most commonly attributed higher costs and
selling prices to tariffs, though increased labour costs are
also prevalent, in part reflecting labor shortages.

“The rise in selling prices for goods and services in July,
which was one of the largest seen over the past three
years, suggests that consumer price inflation will rise
further above the Federal Reserve’s 2% target in the
coming months as these price hikes feed through to
households.”