U.S. economic activity presented a mixed picture in November, as revealed by the latest Purchasing Managers’ Index (PMI) data from S&P Global. The data released Friday reflects a slight contraction in the manufacturing sector and unexpected growth in services.
Manufacturing Sector Takes A Step Back
The S&P Global Manufacturing PMI for the U.S. recorded a slight decrease, falling from 50 to 49.4 points in November, signaling a reentry into contraction territory.
This decline, which missed the market expectations of 49.8, indicates a subtle yet persistent challenge in the manufacturing sector.
Despite improvements in production efficiency, stagnant demand conditions continue to hamper growth, S&P Global said in a note.
Services Sector Shows Unexpected Resilience
In contrast to the manufacturing sector, the U.S. services industry showed marginal growth. The S&P Global Services PMI rose from 50.6 to 50.8 points, surpassing expectations of 50.4.
This uptick, the quickest since July, can be attributed to expanded customer bases and successful marketing strategies, highlighting the sector’s adaptability in a fluctuating economic landscape.
The Composite PMI, an aggregate measure of overall private sector activity, stood unchanged at 50.7 points in November, consistent with the previous month’s three-month high.
Employment Contracts, Layoffs Surge
U.S. companies reduced their workforce levels for the first time in nearly three-and-a-half years, according to S&P Global.
While the decline in employment was slight, it marked a shift into a contractionary phase, which occurred after the service sector saw its first decrease in staffing since June 2020.
Many businesses frequently cited the combination of subdued demand conditions and rising cost pressures as the factors behind their decisions to implement layoffs.
Improving Demand Conditions In Services, Easing Input Price Pressures For Manufacturers
Siân Jones, principal economist at S&P Global Market Intelligence, shed light on the resilience of the U.S. private sector in November.
“Firms signaled another marginal rise in business activity, with the service sector driving improved demand conditions,” said Jones.
The expert highlighted the return to growth in new orders after four months, a positive shift largely attributed…
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