Tags: business | activity | trump

US Business Activity Gauge Rises to 31-Month High

US Business Activity Gauge Rises to 31-Month High
An employee uses an automated packaging machine to creates a made-to-measure bag for small items at the Amazon OXR1 fulfillment center in Oxnard, Calif., on Aug. 21, 2024. (Damian Dovarganes/AP)

Friday, 22 November 2024 10:11 AM EST

A measure of U.S. business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump's administration next year.

S&P Global said Friday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 55.3 this month. That was the highest level since April 2022 and followed a reading of 54.1 in October.

A reading above 50 indicates expansion in the private sector. The PMI at face value implied that economic growth probably accelerated in the fourth quarter. So-called hard economic data like retail sales, however, suggest the economy was maintaining a solid pace of growth this quarter, with weakness in housing and sluggish manufacturing continuing.

The economy grew at a 2.8% annualized rate in the July-September quarter. The Atlanta Federal Reserve is currently estimating fourth-quarter gross domestic product rising at a 2.6% pace.

"The rise in the headline flash PMI indicates that economic growth is accelerating in the fourth quarter," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "The prospect of lower interest rates and a more pro-business approach from the incoming administration has fueled greater optimism, in turn helping drive output and order book inflows higher in November."

The services sector accounted for much of the increase in the PMI, though the decline in manufacturing leveled off.

The survey's measure of new orders received by private businesses rose to 54.9 from 52.8 in October. Price increases slowed further, with the gauge of average prices paid by businesses for inputs falling to 56.7 from 58.2 last month.

Businesses were also not pushing through significantly higher prices amid growing resistance from consumers.

A measure of prices charged by businesses for their goods and services dropped to 50.8, the lowest level since May 2020, from 52.1 in October.

That offers hope inflation could resume its downward trend after progress stalled in recent months, and allow the Federal Reserve to continue cutting interest rates. The U.S. central bank initiated its policy easing cycle with an unusually large half-percentage-point cut in its policy rate in September.

The Fed delivered another 25 basis points reduction this month, which lowered its benchmark overnight interest rate to the 4.50%-4.75% range. The Fed hiked rates by 525 basis points in 2022 and 2023 to curb inflation.

Businesses, however, showed hesitancy boosting their workforces despite being the most confident in 2-1/2 years.

The survey's measure of employment was little changed at 49.0. Services sector employment continued to decline, but manufacturing recovered.

The survey's flash manufacturing PMI inched up to 48.8 from 48.5 last month. The results were in line with economists' expectations. Its flash services PMI rose to 57.0, the highest reading since March 2022, from 55.0 in October. That was well ahead of economists' expectations for a reading of 55.2.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
A measure of U.S. business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump's administration next year.
business, activity, trump
474
2024-11-22
Friday, 22 November 2024 10:11 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved