The latest report by IHS Markit revealed on Wednesday the seasonally adjusted final IHS Markit U.S. Services Business Activity Index (PMI) stood at 59.9 in July, down from 64.6 in June but slightly above the earlier released “flash” estimate of 59.8. The latest reading pointed to the slowest growth in business activity across the U.S. service sector since February.

Economists had forecast the index to stay unrevised at 59.8.

According to the report, a softer rise in new business was a major contributor to the less marked upturn in output in July. Nonetheless, domestic and foreign client demand remained historically strong. Backlogs of work increased solidly and at the joint-fastest pace since August 2020. Meanwhile, employment eased for the third month running, as firms faced challenges in finding staff. On the price front, input prices increased due to supplier shortages, while service firms also highlighted greater fuel costs. The rate of inflation was much faster than the series average, despite easing further from May's historic peak.