US economy unaffected by Brexit vote, but attention turns to presidential election

 
Jake Cordell
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Firms have their eyes on this pair ahead of November's election (Source: Getty)

Fresh economic data from the US has shown the world's largest economy is feeling little fallout from the UK's vote to leave the EU.

Both consumer confidence and business activity in the dominant services sector were "virtually unchanged" between June and July, figures out this afternoon revealed, although caution remained the prevailing sentiment as the US winds up for election season.

The Markit purchasing managers index' (PMI) for services came in at 51.4 on an index where scores above 50 indicate expansion - up from 50.9 in June. Businesses reported their first increase in outstanding orders in a year, with the rate of job creation bouncing up and "sentiment improving markedly from June's record low."

Read more: German firms really aren't bothered by Brexit

Meanwhile, a leading measure of consumer confidence was unmoved over the month, with the Conference Board's (TCB) index coming in a 97.3 compared to 97.4 for June.

"Consumers were slightly more positive about current business and labour market conditions, suggesting the economy will continue to expand at a moderate pace" said Lynn Franco, director of economic indicators at TCB.

Analysts at both Markit and TCB said caution was the prevailing sentiment in the short-term, with November's US Presidential Election a key milestone in the eyes of both households and firms.

Read more: Has the Fed missed the boat on interest rate rises

The data add another piece to the post-Brexit puzzle ahead of tomorrow's meeting of the US Federal Reserve. The rate-setting Federal Open Market Committee (FOMC) is almost certain to hold rates at their current target range of between 0.25 per cent and 0.5 per cent, but analysts will be watching closely for any indication from chair Janet Yellen as to the likelihood of a hike later in the year.

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