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Thursday, March 28, 2024

US Services Economy Surges To 7-Month Highs (As Manufacturing Hits 2 Year Low)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Following US Manufacturing PMI’s tumble to two year lows, amid slowing new orders and employment, Markit reports that US Services PMI rose to 56.5 – its highest since April. Amid a solid increase in job creation (low-paying compared to the job weakness in manufacturing) and improvement in business growth, the divergence between Services & Manufacturing is at its highest since Q3 2013 which presaged a complete collapse in Services.

Does 2013 ring any bells?

Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said:

“The US economy is showing further robust economic growth in the fourth quarter, with the pace of expansion picking up in November.

“The upturn in the flash PMI brings the surveys up to a level indicative of 2.3% annualised GDP growth in November, up from 1.8% in October.

“The surveys therefore suggest the economy is on course to grow by just over 2% again in the fourth quarter, providing additional reassurance on the strength of the economy after yesterday’s GDP revision. The revision to official GDP annualised growth from 1.5% to 2.1% has brought the official third quarter growth rate into line with that signalled by the PMI.

Hiring remains healthy, albeit down on the trend seen earlier in the year. The November survey results are consistent with a non-farm payroll rise of approximately 180,000, down from an average of just over 200,000 in the first ten months of the year.

“The faster pace of growth and healthy hiring trend were accompanied by the sharpest rise in average selling prices seen for four months, providing a triple-boost to the chances of the Fed hiking interest rates at its next meeting.”

Charts: Bloomberg

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