U.S. Economic Contraction Extends to September But Decline Eases, PMIs Signal
24 September 2022 - 12:34AM
Dow Jones News
By Xavier Fontdegloria
The U.S. economy contracted again in September, albeit at a
softer pace than in the previous month as demand recovered,
according to a purchasing managers survey published Friday.
The S&P Global Flash Composite Output Index, which tracks
activity in the manufacturing and services sectors, rose to 49.3 in
September from 44.6 in August. The index suggests the economy
contracted slightly over the month as it came in below the 50.0
no-change mark, but also indicates the pace of contraction eased
compared with August.
The indicator has signaled contraction in activity for three
consecutive months, a quarter that could be the weakest for the
economy since the global financial crisis if the pandemic lockdowns
of early 2020 are excluded, S&P Global chief business economist
Chris Williamson said.
In September, output declined for both manufacturing and
services, but in both cases the rate of contraction moderated,
particularly for services.
The flash U.S. services PMI rose to 49.2 in September from 43.7
in August, a three-month high and above the 45.3 consensus forecast
from economists polled by The Wall Street Journal.
Services providers reported an uptick in new orders, but the
increase was small as high inflation and rising interest rates
weigh on sales, the report said.
Orders also swung back to expansion for U.S. manufacturers,
which saw overall activity growing at a two-month high.
The U.S. manufacturing PMI increased to 51.8 in September from
51.5 in August, beating the 51.2 expected by economists.
However, relatively muted demand and supply chain constraints
continued to hamper output and capacity, with backlogs of work
increasing again, S&P Global said.
Price pressures among manufacturers and services providers
persisted, but eased in September for the fourth consecutive month
due to softening demand and less supply shortages, marking the
slowest increase in prices since the start of 2021, the report
said.
"Inflation pressures nevertheless remain elevated by historical
standards and, with business activity in decline, the surveys
continue to paint a broad picture of an economy struggling in a
stagflationary environment," Mr. Williamson said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
September 23, 2022 10:19 ET (14:19 GMT)
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