Zhitong Finance learned that business activity in the United States picked up in December, with orders and worker demand increasing, which may help ease concerns about a sharp slowdown in economic growth in the fourth quarter.
The U.S. composite PMI output index, which tracks manufacturing and services, rose from 50 in November, according to data released Friday by S&P Global7 rose to 51 of the month0, reaching a five-month high. In general, a PMI index above 50 means that the private sector is expanding.
It is worth noting that this improvement was entirely due to the service sector, while manufacturing activity declined.
The survey was conducted after optimistic news came out of the labor market in November. Data released on Thursday showed a strong start to the holiday shopping season, with retail sales exceeding expectations in November.
These better-than-expected data prompted the Fed to forecast an annualized growth rate of gross domestic product (GDP) for the full year from 12% to 26%。The economy grew at a rate of 52%。
The U.S. Congressional Budget Office also raised its GDP growth for 2023** from 09% revised to 25%, which reflects data as of December 5. The average unemployment rate in the fourth quarter of 2023 is expected to be 39%, compared to 44%。The core personal consumption expenditures (PCE) price index for 2023 is expected to be **34%, down from 41%;2024 is expected to be **24%。
Early PMI data for December showed a slight upturn in the U.S. economy," said Chris Williamson, chief business economist at S&P Global Market Intelligence. Accommodative financial conditions have boosted demand, business activity and employment in the services sector, as well as raising expectations for future output. However, the rising cost of living and the cautious attitude of households and businesses to spending means that the overall growth rate of the services sector is still well below the level seen during the recovery of tourism and leisure activities in the spring and summer. At the same time, weakness in the manufacturing sector continues to weigh on the economy, with lower orders leading factories to cut production, lay off workers and curtail purchases. As a result, despite the economic rebound in December, the survey showed that GDP growth remained weak in the fourth quarter. ”
Economists do not expect a recession next year. The Federal Reserve kept interest rates steady on Wednesday and said in New Economy** that the historic monetary policy tightening of the past two years is over and that borrowing costs are expected to fall in 2024.
The S&P Global survey showed that private companies received new orders from 50 percent in November6 rose to 51 of the month1。Its private sector employment index ranged from 501 climbed to 516。But as demand bumps up, inflation climbs. The measure of corporate input payments** increased from 55 in the previous month8 rises to 577。However, compared to last year, businesses have not had great success in passing on rising costs to consumers.
The manufacturing sector continues to face challenges, with the survey showing a preliminary manufacturing PMI this month from 49 in November due to a drop in orders4 down to 482。The preliminary PMI of the services sector rose from 50 in the previous month8 to 513。New orders, employment and input** all rose.
U.S. industrial output emerged** in November, reflecting a rebound in production activity by automakers and parts makers following the United Auto Workers (UAW) strike. The data shows that due to a surge in automobile production by 718%, and manufacturing output rose 03%, lower than expected. However, manufacturing output, excluding automobiles, fell by 02%。Total industrial production, which includes mining and utilities, increased by 02%。