US services activity remains strong in July as input costs rise, sending mixed signals for crypto markets

The US services sector posted its 25th consecutive month of expansion in July. But under the hood, the picture is messier than the headline number suggests, with input costs climbing and employment slipping into contraction territory. The ISM Services PMI came in at 54.1% for July, a hair above June’s 54.0% reading but below the 54.5% that economists had penciled in. Any reading above 50 signals expansion, and the services sector has now stayed in growth territory for over two years straight. Strong activity, rising prices, fewer workers The Business Activity Index jumped to 59.1%, climbing 3.7 points from the prior month. New Orders rose to 57.2%, up 2.1 points from June. The Employment Index dropped to 47.4%, crossing into contraction territory. The Prices Paid Index surged to 70.3, up from 67.7 in June. The jump was driven in part by petroleum prices and tariff-related cost increases. What the Fed is watching The Prices Paid Index at 70.3 represents a visible re-acceleration of inflation pressures in the services sector. When businesses report paying significantly more for inputs, those costs eventually get passed to consumers. Why crypto traders should care CoinDesk has noted t...