The Purchasing Managers’ Index (PMI) in the United States cooled to 53 points in December from 54.2 points in November, S&P Global announced in a preliminary reading this Tuesday.
Activity slowed to its lowest level since June after also recording the smallest increase in new orders in 20 months. In this sense, demand for services grew only “moderately”, while demand for industrial products fell for the first time in a year.
The report also reported a slight decline in business confidence next year, contributing to job creation slowing and remaining at “minimal” levels.
In turn, inflationary pressures intensified “noticeably” and there was one of the fastest increases in average selling prices since mid-2022. Companies passed on this price increase with the greatest intensity in just over three years. Many companies cited tariffs as the cause.
“Signs of weakness are also widespread, with a near-total stagnation in new orders in the major services sector, coupled with the first decline in industrial orders in a year,” said S&P Global Market Intelligence chief economist Chris Williamson.
“Businesses have also lost some confidence in the outlook and have scaled back hiring in December due to the tougher business environment,” he added.
The analyst also noted that data collected in the December survey is consistent with an annualized improvement in quarterly GDP of 2.5%. Afterwards, the PMI for the services sector fell to 52.9 points from 54.1 in November. Likewise, the industrial sector index rose from 52.2 to 51.8.
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