the us economy slowed in june to a fivemonth low as demand in both the manufacturing and services sector declined amid high inflation data from a purchasing managers survey showed thursday the sp global flash composite output index fell to 512 in june from 536 in may its lowest since january the indicatorwhich gauges activity in both the manufacturing and services sectorssuggests that activity continued to expand but just slightly as the reading is barely above the 500 no change threshold the survey showed that activity in both the factory and services sector weakened markedly with production among manufacturers declining for the first time since the onset of the covid19 pandemic the survey data are consistent with the economy expanding at an annualized rate of less than 1 in june with the goodsproducing sector already in decline and the vast service sector slowing sharply said chris williamson chief business economist at sp global the surveys deteriorating forwardlooking indicators set the stage for an economic contraction in the third quarter he said both manufacturers and services providers reported faltering demand due to the rising cost of living and falling confidence leading to the first contraction in new orders since july 2020 there has  been a remarkable drop in demand for goods and services during june compared to prior months mr williamson said the survey showed that the services sector continued to grow over the month but firms noted that the postpandemic boom is fading the flash us services pmi fell to 516 in june from 534 in may a fivemonth low and missing the 533 consensus forecast from economists polled by the wall street journal goods producers reported the weakest growth in almost two years as both production and new orders declined the flash us manufacturing pmi decreased to 524 in june from 570 in may below economists estimates of 560 the survey data also signaled that the prices continued to rise but at a slower pace compared with previous months a corollary of the drop in demand was less pressure on prices with the surveys inflation gauges for firms costs and their selling prices falling sharply in june to suggest that although still elevated price pressures have peaked mr williamson said