US July's flash PMIs delivered the customary "mixed but positive" verdict that S&P Global produces with the seasonal reliability of a Swiss watch: Manufacturing slipped to a 4-month low of 53.8 while Services surged to an 8-month high of 53.6, with the composite broadly consistent with GDP growing at an annualised 2.0% — a meaningful acceleration from Q2's 1.2% — which sounds encouraging until one reads the footnotes, where S&P Global's own chief economist warns that "some of this improvement may prove short-lived as July saw hospitality spend boosted by the FIFA World Cup and USA 250th anniversary activities" — meaning the economy's best quarter in months was partially powered by Americans watching soccer and eating birthday cake.
The supply chain detail is less festive: July saw an intensification of supply chain delays and a renewed upturn in price pressures, with events over recent days in the Middle East having "only further exacerbated these supply chain and price worries" — which is S&P Global's tactful way of confirming that the same war the consensus declared over in June is now visibly repricing the Q3 economic outlook from "accelerating growth" to "accelerating inflation."
When the best American PMI in eight months is partially explained by a birthday party and a football tournament, the underlying trend is not your friend.
🤵 The Macro Butler Weekly Digest 🤵
🌐 No barrel flows until someone else's rig, sand and crew show up first — energy's picks-and-shovels, paid before the first drop. 🌐
Read more here: https://themacrobutler.substack.com/p/before-the-barrel
🌐 No barrel flows until someone else's rig, sand and crew show up first — energy's picks-and-shovels, paid before the first drop. 🌐
Read more here: https://themacrobutler.substack.com/p/before-the-barrel
Substack
Before the Barrel
No barrel flows until someone else's rig, sand and crew show up first — energy's picks-and-shovels, paid before the first drop