Improved Economy Signals: Shrinking Price Stress, Swiftened Delivery Periods - US Purchasing Managers Index Surpasses Pessimistic Projections

The U.S. economy showed signs of improvement in September, with contractions in both the manufacturing and service sectors easing, according to the latest S&P Global PMI data.

The composite PMI for the U.S., which measures overall private sector activity, registered a slower rate of decline in September compared to August. The composite PMI for the month stood at 49.3, up from 44.6 in August.

U.S. businesses reported a third consecutive monthly fall in output during September. However, the rate of contraction in output declined notably in services, alleviating concerns about the depth of the current downturn. The S&P Global PMI for the U.S. services sector in September was 49.2, up from 43.7 in August. Order books returned to modest growth in the services sector, indicating a potential recovery.

In the manufacturing sector, the S&P Global PMI for September was 51.8, up from 51.5 in August. Manufacturers registered a sharper uptick in output charges in an effort to pass on higher costs to clients. However, firms increased their selling prices at a slower pace at the end of the third quarter, with the overall rate of inflation of firms' costs and average selling prices for goods and services decreasing to the lowest since early-2021.

Supplier shortages eased to the lowest since October 2020, providing some relief to businesses. Inflation pressures remain elevated by historical standards, but the moderation in the increase of selling prices was led by service providers.

Chris Williamson, Chief Business Economist at S&P Global, commented on the data, but the search results do not specify who appointed him. Mr. Williamson stated, "The U.S. economy is clearly struggling in a stagflationary environment, but there are tentative signs that the worst may be over."

The forecast for the U.S. services sector PMI in September was 45.0, slightly lower than the actual figure of 49.2. The forecast for the U.S. manufacturing sector PMI in September was 51.1, slightly higher than the actual figure of 51.8.

In conclusion, while the U.S. economy is still facing challenges, the latest PMI data suggests that the contractions in activity across the manufacturing and service sectors are easing, providing some optimism for the future.

Improved Economy Signals: Shrinking Price Stress, Swiftened Delivery Periods - US Purchasing Managers Index Surpasses Pessimistic Projections