2023-08-23 15:09:00
S&P Global announced on the 23rd that the combined Purchasing Managers Index (PMI) for August, which combines the US manufacturing and service industries, fell to the lowest level in six months, approaching a contraction zone. Sluggish demand weighed on it.
Key Point Composite PMI Preliminary 50.4, down 1.6 points month-on-month – Market forecasts 51.5 Services PMI down to 51 – Forecast 52.2 Manufacturing PMI down to 47 – Index forecast 49 50 marks the line between expansion and contraction in activity indicates
The numbers raise concerns regarding the sustainability of recent strong retail sales. The service sector PMI also fell to its lowest level in six months. New orders fell in both services and manufacturing.
US Composite PMI
Source: S&P Global
“Companies report that demand appears to be increasingly weak in the face of high prices and rising interest rates,” said Chris Williamson, chief business economist at S&P Global Market Intelligence, in a statement. pointed out.
“As a result, new orders have fallen in August, which might lead to production cutbacks in September as companies adjust their capacity to meet a weaker demand environment,” he added.
There were mixed results on inflation. Wages and material costs are growing faster. Meanwhile, sales price growth slowed slightly as businesses worked to stimulate demand for goods and services.
Against the backdrop of sluggish demand, declining orders, and shrinking order backlogs, some companies are cutting staff, while others are curtailing hiring. The employment index hit its lowest level since mid-2020, approaching contraction.
The data also showed companies were becoming more optimistic regarding the outlook. It was supported by expectations that interest rates and inflation would stabilize.
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Original title:US Business Activity Barely Expands on Subdued Customer Demand(excerpt)
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