US business growth slips slightly but remains ‘solid’
Growth in the US private sector was “solid” but cooled off slightly in September as services firms lost some momentum, a preliminary survey has shown.
The IHS Markit US composite purchasing managers’ index (PMI) – which measures the health of companies – slipped to 54.4 in September from 54.6 in August. A score of above 50 indicates growth.
The headline measure was pulled down slightly by the services sector, which saw growth slow compared to August.
That contrasted with the manufacturing sector, where growth increased to hit a 20-month high. Higher domestic demand drove manufacturing growth, with new business rising at a solid pace, data firm IHS Markit said.
Earlier in the day, IHS Markit data showed that the Eurozone’s private sector only just grew in September. Growth in the UK also cooled considerably.
The US fared better, today’s survey showed. “US businesses reported a solid end to the third quarter,” said Chris Williamson, chief business economist at IHS Markit.
Coronavirus and political stalemate pose risks
“The question now turns to whether the economy’s strong performance can be sustained into the fourth quarter.” Williamson said there were a few risks ahead.
Coronavirus infection fates are still running high, with the US suffering the worst death toll in the world.
Meanwhile, Republicans and Democrats are locked in a tense political battle over the death of Supreme Court justice Ruth Bader Ginsburg ahead of the November presidential election. And they cannot agree on a new stimulus deal.
Yesterday, Federal Reserve chairman Jay Powell warned Congress that small businesses and poorly paid workers need more help from the government. He said monetary and fiscal policy needed to act in unison.
US unemployment skyrocketed to 14.7 per cent in April from 3.5 per cent in February. It then slipped back to 8.4 per cent in August.
IHS Markit said both the services and manufacturing sectors continued to add jobs in September.