S&P assured that the data is consistent with inflation of 2% and GDP growth of 1.5% in annual terms
The United States Services Purchasing Managers’ Index (PMI) accelerated in October to 50.6 points from 50.1 registered in September, as revealed by S&P Global.
S&P showed that American companies reported a “slight” increase in activity in the tenth month of the year after the quasi-stagnation that occurred last month and which coincided with an expansion of productive capacity.
The rating agency explained that in October, the number of new orders fell again for the third consecutive month, although at a slower rate thanks to the positive contribution made by orders in export.
Likewise, companies showed themselves “optimistic” with an improvement in demand after the business confidence index rose to the highest level in four months. This situation encourages companies to expand their workforce, albeit at “moderate” rates.
On the price side, service providers reported that the increase in the cost of inputs and final sales value slowed down. In fact, input inflation increased to the most hidden level in three years, and retail prices also became the same, with a speed not observed since October 2020.
“The PMI survey offers a weaker diagnosis of the health of the United States economy than the latest extraordinary GDP data, with the growth of business activity in October weakest for a third month in a row,” said the chief economist at S&P Global Market Intelligence, Chris Williamson.
In this sense, Williamson assured that the report is consistent with an annual GDP increase of 1.5%. On the other hand, the analyst added that the moderation of prices in October is also consistent, for the first time in three years, with the 2% inflation goal pursued by the United States Federal Reserve (Fed).