According to a report by Jinshi, Chris Williamson, chief business economist at S&P Global Market Intelligence, said that U.S. service companies reported strong performance in the second quarter, with output growth reaching the highest level in more than two years. Both new order inflows and hiring are accelerating, with the latter boosted by companies hiring more workers to cope with increased backlogs. Although people are somewhat nervous about the business environment after the election, at least for now, confidence in the outlook for the coming year remains high given the recent support for the expansion of corporate investment.
Part of that optimism is tied to the market’s continued belief that interest rates will start falling by the end of the year. The survey’s further cooling of price pressures — particularly in the services sector — adds to signs that inflation should trend lower in the coming months, opening the door to further rate cuts.
