The service sector grew in the US to 56.5-report
2022.12.05 10:25
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The service sector grew in the US to 56.5-report
Budrigannews.com – In November, activity in the United States’ services industry unexpectedly increased, and employment rebounded. This provides additional evidence of the economy’s underlying momentum as it prepares for a predicted recession next year.
Monday, the Institute for Supply Management (ISM) reported that the non-manufacturing purchasing managers’ index fell to 56.5 from 54.4 in October, the lowest level since May 2020.
Reuters polled economists and predicted that the non-manufacturing PMI would fall to 53.1.A reading higher than 50 indicates growth in the services sector, which is responsible for more than two-thirds of U.S. economic activity.
The survey came on the heels of data that showed that job and wage growth in November was stronger than expected on Friday. In October, consumer spending also increased. The optimistic reports have increased optimism that the anticipated mild economic downturn in 2023 will be brief. Some economists even wager that a sharp slowdown in growth could prevent a recession.
Behind the hand-wringing regarding a recession is the Federal Reserve’s most rapid rate-hiking cycle since the 1980s as it fights inflation. Last week, Fed Chair Jerome Powell said that the United States central bank could slow down the rate increases “as soon as December.”
The increase in activity in the services sector indicates that overall price pressures in the economy may take some time to ease, indicating that spending is shifting away from goods and that the inflation baton has been handed over to services.
The ISM reported last week that manufacturing activity contracted in November for the first time in two and a half years.
The ISM’s measure of employment in the services industry increased to 51.5 in November from 49.1 in October.However, as orders remain unchanged, it is likely that gains will be limited.
From 56.5 in October, the survey’s gauge of new orders received by service businesses decreased to 56.0.Trades tumbled likely due to easing back worldwide development and a solid dollar.
As supply continued to rise, a measure of input prices paid by service industries decreased to 70.0 from 70.7 in October. The survey’s measure of supplier deliveries to the services industry decreased to 53.8 from 56.2 in October.
Slower deliveries are indicated by a reading above 50.The backlog of unfinished work was reduced by businesses in a continued manner.
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