US Service-Sector Report Shows Downward Movement

New orders are hard to get, that's the report from Markit's U.S. service-sector sample where the composite index is down several tenths this month to a 50.9 level for the July flash that is only marginally above breakeven 50. Though some in the sample are reporting strength in orders, others aren't and are blaming a weak economic environment.

Still other indications in the report are positive including a second month of improvement in output and signs of strength in hiring which, despite the weakness in new orders, is picking up slightly. A big positive in the report is a jump in business confidence which, post-Brexit, is up from a record low and at its best level since the start of the year. A negative, especially for policy makers, is weakness in price readings with input costs rising at the slowest rate since January. Traction for selling prices is minimal.

The upturn in the business outlook is a big positive in this report though current data are not pointing to much ongoing economic strength.