The preliminary survey of purchasing managers’ index (PMI) released by S&P Global on Wednesday (23rd) showed that the composite PMI in the US fell to 46.3 in November from 48.2 in the previous month, contracting for the fifth month in consecutively, although data showed that weak demand could push the US economy further into recession, but at the same time inflation is slowly cooling.
Markit US November PMI report:
- The initial value of the manufacturing PMI was 47.6, below the market expectation of 50.0, and the previous value was 50.4
- The initial service industry PMI value was 46.3, below the market expectation of 48.0, and the previous value was 48.2
- The initial headline PMI was reported at 46.1, below market expectations of 47.9, and the previous reading of 47.8
According to the report, the new orders index fell to 46.4 from 49.2 in the previous month, the biggest contraction since May 2020. Manufacturers and service providers pointed to the sharp contraction and weak demand, rising interest rates, economic uncertainty and still The ongoing effect of high inflation.
The initial reading of the US services PMI in November was 46.3, well below market expectations of 48 and the previous reading of 48.2 It shrank at the second fastest rate in more than two years, and the new business index shrank for the third time in four months.
On the other hand, the US manufacturing PMI in November fell below the 50 line of growth and contraction to 47.6 from 50.4 in the previous month, the lowest level on record since May 2020. Except for the first few months of the epidemic new crown, production and order indicators were at their fastest decline since 2009.
Encouragingly, however, the input price index slipped to 65.7 from 67.0 the previous month, the lowest level since December 2020, marking the sixth consecutive month of decline and reflecting the easing of supply bottlenecks, although the index continued to be at its highest ever. The performance of the index is also in line with reports released by the United States this month, and both the consumer price index (CPI) and the producer price index (PPI) slowed significantly in October.
In terms of employment, factories are still facing challenges to find workers, suggesting that wages remain sticky and that the slowdown in inflation will be gradual.
The report also showed that business output is expected to rise next year, reflecting more stable supply chains, although the figure is still lower than a year ago, while companies raise product prices at the slowest pace in more than two years, partly due to the reduction in demand On the other hand, concessions and discounts are made to attract customers to place orders.
S&P’s Chief Global Business Economist, Chris Williamson (Chris Williamson) said that the wind for business reports is increasing, including rising living costs, tightening financial conditions (especially higher borrowing costs), and US domestic and export markets States and demand weakens.
In this environment, he believes, inflation should continue to cool in the coming months, possibly even significantly, but at the same time the economy will slide further into a possible recession.
