Preliminary
data issued by S&P Global on Monday revealed that U.S. private sector
business activity expanded again in early December and at a quicker pace than in the previous month,
reflecting a further surge in service sector activity that more than offset a
steeper contraction in manufacturing production.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index
(PMI) Output Index came in at 56.6 early this month, up from 54.9 in November. The
latest reading indicated the fastest growth in business activity at U.S. companies since March 2022.
A reading above
50 signals an expansion in activity, while a reading below this level signals a
shrinkage.
S&P Global
flash services PMI checked in at 58.5 in December, up from 56.1 in November. The latest reading pointed
to the strongest increase in activity across the services sector since October 2021. Economists had forecast the services PMI to drop to 55.7.
Meanwhile, S&P
Global flash manufacturing PMI fell to 48.83 in December from 49.7 in the
previous month. The latest print signalled a deterioration in business conditions
within the goods-producing sector for a sixth straight month with the rate of downturn
accelerating to the fastest since September. Economists had expected the manufacturing PMI to rise to 49.8.
S&P Global
noted that activity levels were expanded at an increased
rate in December in response to strengthening demand. New orders rose at the
sharpest rate since April 2022, boosted by new orders for services. Employment advanced
slightly in December, up for the first time in five months, reflecting a second
successive monthly gain in manufacturing jobs and the first increase in service
sector employment since July. On the price front, inflationary pressures eased
further at the headline level, albeit with a surge in input cost inflation in
manufacturing.