As much as President Joe Biden might deny it, the economy appears to be seriously struggling under his administration.
According to one preliminary economic report, July has ushered in an unexpected deceleration in the services sector.
Some economic growth continues
Breitbart cited the report from IHS Markit, which comes ahead of the first estimate of the nation’s second-quarter gross domestic product.
The results point to a troubling trend based on surveys completed by company executives and used to measure projected growth.
For its July index, the organization reported a four-month low of 59.7 this month, compared to 63.7 in June. Any number above 50 indicates economic growth.
Although the evidence shows that some economic growth is still occurring following the worst of the COVID-19 pandemic. Nevertheless, the abrupt slowdown is a bit of unanticipated bad news.
Notably, June also showed a decrease in the index from May, leading some economists to predict a rebound in July that does not appear to have materialized.
“Cost burdens rose robustly”
IHS Markit included some likely causes for the economic slowdown as part of its report.
“Contributing to the softer expansion of business activity was a slower upturn in new business across the service sector in July,” the group wrote. “The pace of growth was the least marked for five months, as some firms noted customer hesitancy amid significant hikes in selling prices. Similarly, the rate of increase in new export orders eased.”
The report went on to cite the fact that “cost burdens rose robustly” this month, noting that “with the exception of record rates of input price inflation seen in May and June, the pace of increase was the sharpest since comparable data for goods and services were available in October 2009.”
Consumers became increasingly hesitant about making purchases, the group concluded, as “the rate of selling price inflation for goods and services remained historically steep in July, as firms sought to pass on higher costs to clients.”
There was still a note of optimism about the future included in the report, however, even amid “short-term capacity” concerns brought on by “constraining output in many manufacturing and service sector companies while simultaneously pushing prices higher as demand exceeds supply.”