Markit Services PMI Remained Muted In July, 2016

The July US Services Purchasing Managers' Index conducted by Markit came in at 51.4, unchanged from the preliminary estimate and little changed from 51.3 in June. The Investing.com consensus was for a slightly lower 51.0. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

Here is the opening from the latest press release:

The seasonally adjusted Markit final U.S. Services PMI Business Activity Index registered 51.4 in July (earlier ‘flash’ estimate: 50.9), which was unchanged from the figure recorded in June and above the neutral 50.0 threshold for the fifth consecutive month. However, the latest reading remained indicative of only a very modest expansion of business activity that was softer than the post-crisis trend (55.4). [Press Release]

Here is a snapshot of the series since mid-2012.

Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management, which they refer to as "Non-Manufacturing" (see our full article on this series here).

The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.

Both series have weakened over the past several months. The interim three-month moving average of the Markit Services index peaked in August of 2014. The ISM index peaked in September of 2015. The two were fairly closely aligned at the beginning of this year, but they have diverged in recent months with the Markit index signaling noticeably weaker growth.