The US manufacturing and services sectors grew less than expected in September, according to S&P Global’s US Flash PMI reading.
The S&P Global US Manufacturing PMI hit 52, below the 52.2 expected by economists polled by Bloomberg and the reading of 53 last month. Meanwhile, the US Services PMI was 53.9, below the reading of 54 expected and 54.5 last month. Readings above 50 signal expansion in the sectors.
“PMI survey data are consistent with the economy expanding at a 2.2% annualized rate in the third quarter,” wrote Chris Williamson, chief business economist at S&P Global Market Intelligence.
“However, the monthly profile is one of growth having slowed from its recent peak back in July, and September saw companies also pull back on their hiring,” he wrote, adding to a larger narrative of cracks in the labor market. S&P Global’s report on Tuesday noted a slower rate of job creation in the services sector, while the manufacturing sector saw job losses due to cost-cutting.
Meanwhile, the report said input price inflation in the manufacturing sector remained elevated at one of the highest rates since the pandemic, and inflation hit its highest level since May in the services sector.
“Although tariffs were again cited as a driver of higher input costs across both manufacturing and services, the number of companies able to hike selling prices to pass these costs on to customers has fallen, hinting at squeezed margins but boding well for inflation to moderate,” Williamson wrote.
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