Final Services PMI 54.6 — 9-Mo High, Charge Inflation 14-Mo High

Fundamentals · 2026-08-05

S&P Global US Services PMI FINAL July 54.6 (revised UP from Flash 53.6, from June 51.2) — 9-MONTH HIGH — Composite PMI 54.5 (from 51.9, highest since Oct 2025) — New orders 19-month high (services steepest since Nov 2025) — Employment ROSE for 1st time since April (8-mo high in service hiring) — Business optimism 8-month high (strongest since Nov 2025) — Backlogs sharpest rise since Feb — INPUT COST INFLATION HIGHEST since May 2025 (tariffs + fuel + raw materials) — Charge inflation 14-MONTH HIGH — EXPORT orders deteriorated sharpest since late 2022 (tariffs + Middle East) — Data collected July 9-29 (pre-Aug 3 Trump tariff escalation)

What Is This?

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Summary

Services PMI Final printed 54.6 in July — REVISED UP a full point from the Flash 53.6 preliminary and vaulting from June's 51.2. This is the strongest services expansion in 9 MONTHS. Composite PMI 54.5 (up from 51.9, highest since October 2025). Under the hood: New orders rose at the strongest pace since November 2025 (services) and 19-MONTH HIGH (composite), Employment ROSE for the FIRST TIME since April (marginal but the direction shift matters and 8-month high in services hiring rate), business optimism climbed to its highest since November 2025, and backlogs of work rose at the sharpest rate since February. But the inflation side is where Warsh gets his cleanest cover: input cost inflation reached its HIGHEST since May 2025 (Williamson: "Tariffs, together with higher raw material and fuel costs, were widely cited as key drivers"), and charge inflation ripped to a 14-MONTH HIGH — Composite selling prices hit their quickest pace in EXACTLY one year, and Composite input prices hit their HIGHEST since November 2022. Export orders deteriorated sharply — steepest fall since late 2022 — attributed directly to higher tariffs and Middle East war. Williamson: "the stronger performance partly reflected temporary factors... consumer-facing service providers, spending on which surged at a rate not seen for over four years linked to the FIFA World Cup and US Independence Day events." He also flagged that "hostilities in the Gulf escalating as the month progressed" means "the geopolitical environment is now likely once again acting more as a headwind to growth while exacerbating already-elevated price pressures." Williamson's GDP tracking: PMI implies 2.3% annualized Q3 GDP vs 1.5% Q2 GDP Advance. This lands after yesterday's ADP +44K MISS + job-changer pay +7.0% (fastest since Aug 2025), Aug 3 ISM Mfg PMI 55.6 (fastest expansion 4+ years) + Prices 71.1, Aug 3 Final Mfg PMI 53.9, July 30 Q2 GDP purchases price index +5.7% (hottest since 2022), and Trump's 10-12.5% tariffs on 60 countries announced Aug 3. Warsh's "if inflation stays high, rates could be part of the solution" gets its cleanest data validation yet. 3 hawkish dissenters (Hammack, Kashkari, Logan) look increasingly prescient. Employment first rise since April + JOLTS openings -178K yesterday = mixed labor picture but wage stickiness intact (ADP job-changer 7.0%, ECI +0.9%, UoM inflation expectations 4.2% stuck).

Impact on USD

Impact on US Indices (ES / NQ / YM)

Impact on Gold

TLDR

S&P Global Final Services PMI (July 2026, released August 5):

Services PMI 54.6 9-mo high + charge inflation 14-mo high = pure Warsh validation. Williamson flags temporary World Cup/Independence Day boost + Middle East escalation now headwind — August data likely to soften on activity while inflation pressures persist. 3 hawkish dissenters get their cleanest cover yet. Watch ISM Services (today), Powell FOMC minutes Aug 20, Jackson Hole late August, PPI Aug 12, CPI Aug 12, next FOMC Sept 16-17.

_For informational purposes only. Not investment advice._

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