Key Takeaways
- The U.S. ISM Services Index slowed to 50.1 in July from 50.8, indicating a deceleration in services sector growth, while the Prices Paid component surged to 69.9 from 67.5, signaling persistent inflationary pressures.
- The U.S. job market is showing signs of cooling, with the Financial Times reporting that the lowest-paid workers are experiencing the sharpest drop in wage growth.
- Despite earning six-figure salaries, many high-income Americans do not feel wealthy, according to CNBC, underscoring the impact of inflation and rising living costs.
- Coinbase (COIN) has expanded its payment options in Canada, allowing customers to use PayPal for buying and selling cryptocurrency.
The U.S. services sector experienced a notable slowdown in July, with the Institute for Supply Management (ISM) Services Index dipping to 50.1, down from 50.8 in June. This figure, which barely remains in expansion territory (above 50), fell short of analyst expectations of 51.5, suggesting a deceleration in overall economic activity within the dominant services sector.
Despite the slowdown in growth, inflationary pressures appear to be intensifying. The Prices Paid component of the ISM Services Index jumped sharply to 69.9 in July, up from 67.5 in June, marking its highest level since October 2022. This indicates that businesses in the services sector are facing increasing costs, which could eventually translate into higher prices for consumers.
Concurrently, the U.S. labor market is showing signs of cooling. The Financial Times reports that wage growth for the lowest-paid U.S. workers has seen the sharpest decline. This trend, coupled with a further weakening of the Employment Index within the ISM Services report to 46.4 from 47.2, points to a softening job market that could disproportionately impact lower-income earners.
Amidst these economic shifts, a significant portion of high-income Americans with six-figure salaries still report not feeling rich, as highlighted by CNBC. This sentiment is attributed to rising living costs, increased debt levels, and lifestyle-related expenses, suggesting that inflation and economic pressures are impacting financial perceptions across various income brackets.
In corporate news, Coinbase (COIN) announced an expansion of its services in Canada. Customers in Canada can now utilize PayPal for both buying and selling cryptocurrency, streamlining access to the platform's offerings and potentially lowering transaction friction and fees. This move aims to expand access to the crypto economy through a widely used and trusted payment platform.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.