Mixed signals on the U.S. economy Monday: Business activity slowed for the third straight month in August, but homes sales rose in July.
IHS Markit said its flash U.S. Composite PMI Output Index that tracks the manufacturing and services sectors fell to its lowest level since December to 55.4. A reading above 50 indicates growth, but that level has dropped from 59.9 in July.
What’s more it marks the third straight monthly fall. IHS’ separate gauges for the manufacturing and services sectors both fell more than expected in July.
The culprits: the rapidly spreading Delta variant and shortages of raw materials and labor. The shortages are also fanning inflation. Prices paid by services companies and manufacturers rose, with factory input prices hitting another record high.
But investors got positive news on the housing economy. Existing home sales rose for the second straight month in July as inventories improved moderately and prices slipped. Home resales, which account for the bulk of U.S. home sales, rose 2% from June.
The data come ahead of the Fed’s annual economic symposium at Jackson Hole, Wyoming later this week, where investors will be on the lookout for any clues on how soon the central bank may curtail its accommodative monetary policy that has fueled the economic rebound.