Preliminary data issued by S&P Global on Friday showed that U.S.
private sector business activity expanded further in early December, driven by a quicker growth in the services
sector. Meanwhile, manufacturers saw a deeper contraction.
According to the report, S&P Global flash U.S. Composite purchasing
manager's index (PMI) Output Index came in at 51.0 early this month, up from
50.7 in November. The latest reading indicated a modest increase in business
activity that was also the fastest since July.
A reading above 50 signals an expansion in
activity, while a reading below this level signals a contraction
S&P Global flash manufacturing PMI declined to 48.2 in December from
49.4 in the previous month. The latest print pointed to a sharper deterioration
in operating conditions across the goods-producing sector and marked the
steepest shrinkage since August. Economists had predicted the manufacturing PMI
to drop to 49.3.
Meanwhile, S&P Global flash services PMI checked in at 51.3 in December,
up from 50.8 in November. The latest reading indicated the 11th
straight monthly expansion in activity across the sector, the pace of which was
also the strongest since July. Economists
had forecast the services PMI to decrease to 50.6.
S&P Global noted that a quicker upturn in output was supported by the
sharpest advance in new orders since July. Growth was driven by the service
sector, as manufacturers recorded a further downturn in new orders and a
renewed drop in production. Meanwhile, employment grew at the fastest pace in
three months, supported by a resumed increase in job creation in the service
sector, which more than offset a third successive monthly round of job reduction by goods producers. On the price
front, the pace of input price inflation picked up to the steepest since
September, while the pace of charge inflation slowed from November.