Loading ...One Purchasing Managers Index said services fell further in June, but more slowly; the other said activity started climbing out of the hole. Both agree: Jobs dropped further.
By Wolf Richter for WOLF STREET.
the data this morning showed majestic bounces.
But what do these bounces mean?
Not what some of the headlines said. PMIs are peculiar creatures. They don’t measure activity in dollars. The surveys ask executives how various aspects of their business changed in the current month compared to the prior month: up, down, or no change. There are no dollars or other quantity measures involved.
The PMIs this morning reflect how these aspects changed in June compared to May: up, down, or no change:
- PMI value of 50 = no change, same as May; it stopped getting worse.
- PMI value below 50 = further contraction from May levels; it still got worse.
- PMI value above 50 = expansion from May levels; it got better but it says nothing about how much further service activity as measured in dollars has to expand before getting back to where it was.