Home Economy US economy cools more sharply than expected in August, surveys indicate

US economy cools more sharply than expected in August, surveys indicate

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US economic activity slowed more sharply than expected last month as the Delta variant of Covid-19 hit demand for services and supply chain disruptions hit record highs, the results of two closely-followed surveys revealed.

IHS Markit‘s services sector Purchasing Managers’s Index slipped from a reading of 59.9 for July to 55.2 in August (consensus: 59.2).

In parallel, a rival PMI for manufacturing dropped from 63.4 to 61.2 (consensus: 63.0).

Commenting on the latest survey readings, Chris Williamson, chief business economist at IHS Markit said: “The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales.

“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring. Jobs growth waned to the lowest since July of last year…

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