Zforex
zForex.com Representative
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In August, the U.S. services sector unexpectedly strengthened, showing an increase in new orders and higher input costs, which could indicate lingering inflation pressures. The Institute for Supply Management (ISM) reported a Non-Manufacturing PMI of 54.5, marking its highest level since February and a notable increase from July's 52.7. A reading above 50 suggests growth in the services industry, a significant part of the economy. Economists had predicted a drop to 52.5, with none expecting a reading above 53.9.
Federal Reserve officials have raised interest rates by 5.25 percentage points over the past year and a half to combat high inflation. They've welcomed signs of higher borrowing costs impacting the economy. Inflation, measured by the personal consumption expenditures (PCE) price index, stood at 3.3% in July, down from a peak of 7% last summer.
Monthly job growth has averaged around 150,000 over the past three months, a decrease from 238,000 in the previous three months. The ISM also reported a 10th consecutive month of contraction in the manufacturing PMI for August. These indicators suggest the Fed might keep its policy rate steady in the upcoming meeting and potentially halt rate hikes.
Fed Governor Christopher Waller, known for his hawkish stance, expressed cautious optimism, emphasizing the importance of the services sector in taming inflation. The latest ISM report showed an increase in new orders (57.5 in August from 55.0 in July) and higher prices paid for inputs (58.9 in August from 56.8 in July), indicating a continued lack of evidence of a slowdown in inflationary pressures.
Federal Reserve officials have raised interest rates by 5.25 percentage points over the past year and a half to combat high inflation. They've welcomed signs of higher borrowing costs impacting the economy. Inflation, measured by the personal consumption expenditures (PCE) price index, stood at 3.3% in July, down from a peak of 7% last summer.
Monthly job growth has averaged around 150,000 over the past three months, a decrease from 238,000 in the previous three months. The ISM also reported a 10th consecutive month of contraction in the manufacturing PMI for August. These indicators suggest the Fed might keep its policy rate steady in the upcoming meeting and potentially halt rate hikes.
Fed Governor Christopher Waller, known for his hawkish stance, expressed cautious optimism, emphasizing the importance of the services sector in taming inflation. The latest ISM report showed an increase in new orders (57.5 in August from 55.0 in July) and higher prices paid for inputs (58.9 in August from 56.8 in July), indicating a continued lack of evidence of a slowdown in inflationary pressures.
