US Economy Defies Expectations with Strong July PMI Readings

The US economy showed surprising resilience in July, as S&P Global's flash PMI data revealed manufacturing, services, and composite readings all above 53. The composite output PMI clocked in at 53.6, its highest level in eight months.

Services came in above 53, while manufacturing landed at 53.8, technically a three-month low but still comfortably in expansion territory. Anything above 50 signals growth, and above 53 indicates growth that's hard to ignore.

The PMI figures suggest the private sector isn't just expanding, it's doing so with conviction. The services side of the economy is particularly important, as it represents the lion's share of US economic output.

Strong PMI figures tend to fuel risk-on sentiment, and this news could give central bankers less reason to cut interest rates. If the economy is humming along at a composite 53.6, the Fed can afford to be patient or even hawkish on rate policy. Higher-for-longer rates would compress valuations on risk assets like Bitcoin.