The U.S. Services Purchasing Managers’ Index (PMI) reached 56.1 in November, marking the highest growth since March 2022. This increase was driven by a significant rise in new business and orders.
However, the figure fell short of market expectations, which had anticipated a PMI of 57. S&P Global reported notable increases in both business activity and new orders throughout the month, with expansion rates accelerating.
Despite this growth, companies remained cautious about hiring, resulting in a slight reduction in job openings. This cautious approach contributed to a backlog of pending business.
Some businesses noted that the recent presidential election results and the end of uncertainty surrounding the voting process encouraged customers to place new orders. This sentiment was reflected in the survey data.
The composite PMI, which combines both services and manufacturing data, rose to 54.9 in November from 54.1 in October, achieving its highest level in 31 months.
The improved performance in the services sector offset a further decline in manufacturing during November, boosting overall business activity growth to its fastest pace in over two and a half years.
US Economic Indicators
Recent survey data suggests that GDP could grow at an annualized rate of 2.6% in the fourth quarter, assuming similar robust expansion continues into December.
On another note, the Services PMI calculated by the Institute for Supply Management (ISM) decreased from 56 in October to 52.1 in November.
Despite this drop, it remained above the neutral level of 50 for the ninth consecutive month in 2024. The ISM result was below investor expectations, which had projected an increase to 55.6.
Within the ISM report, the new orders index fell from 57.4 in October to 53.7 in November, while the employment index declined from 53.0 to 51.5. The business activity index also decreased from 57.2 to 53.7 during this period.
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