WASHINGTON, Aug. 3 (Xinhua) -- The U.S. services sector posted a faster growth in July than the previous month, with signs of supply bottlenecks easing, the Institute for Supply Management (ISM) reported Wednesday.
The Services Purchasing Managers' Index (PMI) registered 56.7 percent, 1.4 percentage points higher than June's reading, according to the latest Services ISM Report on Business. Any reading above 50 percent indicates the services sector is generally expanding.
"There was a broad pickup in service sector activity in July according to the ISM services index," Tim Quinlan and Shannon Seery, economists at Wells Fargo Securities, said in an analysis.
"A jump in new orders bodes well for coming demand, and an array of measures suggests supply chain pressures continue to ease," they noted. The New Orders Index figure of 59.9 percent is 4.3 percentage points higher than the June reading.
Meanwhile, the Supplier Deliveries Index registered 57.8 percent, 4.1 percentage points lower than reported in June, indicating faster deliveries and improved supply chain situation.
Noting that the Supplier Deliveries Index slid to the lowest index reading in a year and a half, Quinlan and Seery said that "we've seen supply pressures begin to ease throughout the economy, and shortening delivery times are allowing businesses to restock inventory and meet order backlogs."
The Prices Index declined for the third consecutive month in July, down 7.8 percentage points to 72.3 percent. The Employment Index (49.1 percent) contracted for the second consecutive month.
"Restaurant sales have softened the past few weeks (due to) post-holiday and seasonality factors," said a business executive from the Accommodation & Food Services industry.
"Staffing remains a challenge in some markets. Many of our locations in (Los Angeles County) received news that there could be a return to (indoor) mask mandates," the executive said.
A business executive from Construction industry, meanwhile, noted that interest rates have "significantly impacted" the homebuilding market. "Cancellation rates have increased, as homebuyers can no longer afford the monthly payment. Traffic to our communities is down. Inflation has sidelined many would-be buyers," the executive said.
The latest Services PMI was released two days after the ISM reported that the July Manufacturing PMI registered 52.8 percent, down 0.2 percentage point from the reading in June. The Manufacturing PMI in June was already down by 3.1 percentage points from the May reading.