U.S. Economic Growth Slowed Slightly in November, PMI Survey Shows

U.S. private sector growth remained robust in November, albeit losing some pace as activity slowed among services providers, according to a survey of purchasing managers.

The flash U.S. composite output index decreased to 56.5 in November from 57.6 in October, a two-month low, according to data from IHS Markit released Tuesday.

The index is based on data from the firm’s PMI surveys for manufacturing and service sectors. A reading above 50 indicates growth, while a level below 50 signals contraction.

The reading signals a sharp upturn in business activity in November despite growth being constrained by labor shortages and supply-chain bottlenecks, the report said.

Despite a slower rate of expansion in November, growth remains above the survey’s long-run pre-pandemic average as companies continue to focus on boosting capacity to meet rising demand, said Chris Williamson, chief business economist at IHS Markit. “The U.S. economy continues to run hot,” he said.

Softer growth was largely led by the service sector, as manufacturers posted a slightly stronger increase in production.

IHS Markit’s flash U.S. services business activity index fell to 57.0 in November from 58.7 in October, missing the 58.9 reading expected by economists polled by The Wall Street Journal.

Services providers signaled a sharp upturn in output supported by greater travel both domestically and internationally, the report said. New business continued to grow, albeit at a slower pace than in previous months, it said.

The IHS Markit flash manufacturing PMI increased to 59.1 in November from 58.4 in October, in line with economists’ forecast of 59.0.

Despite the rise, production continued to be constrained by raw material delays and labor shortages.

In a sign that supply-chain bottlenecks could start to abate, supplier delivery delays eased to the lowest for six months, IHS Markit said. However, firms from both the manufacturing and services sectors continued to report broadening inflation pressures, and many passed on higher costs to customers.

“Although some resistance to higher prices was seen in the survey responses, serving to dampen demand growth to the slowest for nearly a year, average prices charged for goods and services continued to rise at an unprecedented rate,” Mr. Williamson said.
Source: Dow Jones