Preliminary data issued by S&P Global on Friday revealed that U.S.
private sector business activity contracted in early September albeit at a softer pace than in August.
According to the report, S&P Global flash services purchasing
manager's index (PMI) increased to 49.2 in early September from 43.7 in the
previous month. This was the highest reading in three months but still pointed
to shrinkage in activity across the service sector. Economists had expected the
reading to decline to 45.0. A reading above 50 signals an expansion in
activity, while a reading below this level signals a contraction. The softer pace
of contraction in the service sector in September was mainly due to a pick-up
in new orders and client demand. On the price front, the rate of cost inflation
cooled to the slowest since January 2021, while output charges recorded the slowest
uptick for almost two years.
.The S&P Global flash manufacturing purchasing manager's index (PMI)
came in at 51.8 early this month, marginally up from 51.5 in August. Economists had anticipated the indicator to fall to 51.1. The headline index continued
to point to a relatively subdued improvement in the health of the manufacturing
sector, weighed down by a further decline in production amid relatively muted demand
and supply chain constraints. Meanwhile, new orders increased for the first
time in four, albeit only slightly. On the price front, input costs rose at a
softer pace during September, while output charges increased at a sharper rate.
Overall, S&P Global flash U.S. Composite PMI Output Index checked in
at 49.3 in September, up from 44.6 in August. This was the highest reading in three
months.