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NEW YORK: US business activity showed little change in September, with the vast services sector essentially stalling at its slowest pace since February and overall order activity falling to the lowest level this year, a questionnaire published on Friday.
S&P Global said its flash US Composite PMI index, which tracks manufacturing and services sectors, fell to a reading of 50.1 in September, down from a last August reading of 50.2. September’s result was negligibly above the 50 level that separates growth and contraction.
The survey’s composite new orders index fell to its lowest level since December at 47.7, down from 49.2 last month. This is the second month in a row in which new production has fallen. Pressure on input costs also remained higher for a second month.
The U.S. economy so far this year has defied predictions that it would enter a recession that most economists had expected would be caused by the Federal Reserve’s aggressive rate hikes aimed at suppressing inflation. Job growth and consumer spending have all held up, and the pace of inflation has slowed significantly. Fed officials on Wednesday upgraded their economic forecasts to a level that suggests many of them now believe a recession can be averted altogether.
At the same time, the Fed left rates unchanged but indicated that borrowing costs will remain high well into next year, which could hinder the economy’s progress from here on out. A series of indicators over the past month have suggested that momentum is slowing, and Friday’s PMI data confirmed that view.
“PMI data for September added to concerns about the evolution of demand conditions in the U.S. economy following rate hikes and elevated inflation,” Sian Jones, chief economist at S&P Global Market Intelligence, said in a statement.
The survey’s services PMI fell to an eight-month low of 50.2, fractionally lower than the 50.6 expected by economists in a Reuters poll. The S&P manufacturing PMI rose to 48.9 from 47.9 in August, but was still the fifth straight month of contraction. Economists had forecast a manufacturing PMI of 48.0.
Despite the softening environment, respondents from both manufacturing and services sectors said companies continued to expand their workforces this month. Overall employment growth was the strongest in four months, led by the services sector, but this may be difficult to match in coming months.
“The subdued demand did not translate into overall job losses in September, as an increased ability to find and retain workers led to a faster increase in employment growth,” Jones said. “That said, the hiring boost from increasing candidate availability may not be sustained given the growing spare capacity and shrinking backlogs that previously supported workloads.”
S&P Global said its flash US Composite PMI index, which tracks manufacturing and services sectors, fell to a reading of 50.1 in September, down from a last August reading of 50.2. September’s result was negligibly above the 50 level that separates growth and contraction.
The survey’s composite new orders index fell to its lowest level since December at 47.7, down from 49.2 last month. This is the second month in a row in which new production has fallen. Pressure on input costs also remained higher for a second month.
The U.S. economy so far this year has defied predictions that it would enter a recession that most economists had expected would be caused by the Federal Reserve’s aggressive rate hikes aimed at suppressing inflation. Job growth and consumer spending have all held up, and the pace of inflation has slowed significantly. Fed officials on Wednesday upgraded their economic forecasts to a level that suggests many of them now believe a recession can be averted altogether.
At the same time, the Fed left rates unchanged but indicated that borrowing costs will remain high well into next year, which could hinder the economy’s progress from here on out. A series of indicators over the past month have suggested that momentum is slowing, and Friday’s PMI data confirmed that view.
“PMI data for September added to concerns about the evolution of demand conditions in the U.S. economy following rate hikes and elevated inflation,” Sian Jones, chief economist at S&P Global Market Intelligence, said in a statement.
The survey’s services PMI fell to an eight-month low of 50.2, fractionally lower than the 50.6 expected by economists in a Reuters poll. The S&P manufacturing PMI rose to 48.9 from 47.9 in August, but was still the fifth straight month of contraction. Economists had forecast a manufacturing PMI of 48.0.
Despite the softening environment, respondents from both manufacturing and services sectors said companies continued to expand their workforces this month. Overall employment growth was the strongest in four months, led by the services sector, but this may be difficult to match in coming months.
“The subdued demand did not translate into overall job losses in September, as an increased ability to find and retain workers led to a faster increase in employment growth,” Jones said. “That said, the hiring boost from increasing candidate availability may not be sustained given the growing spare capacity and shrinking backlogs that previously supported workloads.”
