The US economy has taken its foot off the gas and is headed for a slowdown in the final three months of the year, new survey data reveal today.
The sales managers’ index compiled by World Economics slid to a score of 55.6 in October from September’s 57.9. While the score is above the 50 no change mark – implying the economy grew in October – it signals a loss of momentum.
Businesses reported a fall in confidence, the slowest sales increase for 11 months and the most sluggish rate of hiring in over a year.
The US economy grew at a an annual rate of 3.9 per cent in the three months to June – the second quarter (Q2) – but World Economics forecasts the figure to fall to 2.6 per cent in the three months to September and 1.5 per cent going into the final three months of 2015".
World Economics chief executive Ed Jones said:
The Headline SMI Index for the US economy in October indicates that economic expansion in Q4 will continue, but at a rate below that witnessed in Q2 and estimated for Q3. Based on the latest SMI data real GDP growth for Q4 is estimated at around 1.5 per cent.
He added that the weak growth of the economy would likely prevent the US central bank, the Federal Reserve, from hiking interest rates at their next meeting at the end of this month.