US October S&P Global flash services PMI 50.9 vs 49.8 expected!
In a surprising turn of events, business activity in the US accelerated during October, defying economists’ expectations of a continued downturn. S&P Global’s flash US composite Purchasing Managers’ Index (PMI) for October, encompassing both the services and manufacturing sectors, rose to 51, up from 50.2 in September, surpassing the anticipated 50. This unexpected improvement has instilled hopes of a soft landing for the US economy, marking a positive start to the fourth quarter.
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Chief Business Economist at S&P Global Market Intelligence, Chris Williamson, expressed optimism about the situation, emphasizing that the recent upturn in US output growth, especially after a period of pessimistic economic indicators, is encouraging news. Despite concerns about the Federal Reserve’s interest rate hiking campaign potentially driving the US into recession, the data suggests a scenario where the economy manages minimal growth while inflation decreases.
While some service providers cited the impact of high interest rates and challenging economic conditions on client demand, other sectors demonstrated signs of growth. Notably, the US manufacturing PMI rose above 50, indicating expansion and marking the first increase in manufacturing demand in six months.
Crucially, long-term outlook among business participants has also improved significantly. Service providers are now the most confident about the next 12 months since May 2022. Despite rising geopolitical concerns and domestic political tensions, future output expectations have turned positive, indicating a more optimistic economic trajectory.
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