U.S. business activity cooled to a four-month low in April on weak demand, while inflation rates eased slightly even as input prices rose sharply, suggesting possible relief in the future.
The figures come as the Federal Reserve (Fed, central bank) looks for signs that the economy is weakening enough to reduce inflation further.
S&P Global reported Tuesday that its U.S. Manufacturing Composite PMI, which analyzes the manufacturing and services sectors, fell from 52.1 in March to 50.9 in April. A reading above 50 indicates expansion in the private sector.
Manufacturing and services continue without recovery
The manufacturing sector entered contraction territory, the survey’s preliminary manufacturing PMI fell to 49.9 from 51.9 in March.
New orders contracted slightly, while employment growth slowed, albeit moderately, and supply chains showed signs of spare capacity.
Meanwhile, the PMI index for the services sector fell to 50.9 in April, compared to 51.7 the previous month.
The slowdown reflected weaker growth rates in both the manufacturing and services sectors, with activity falling to three- and five-month lows, respectively. This, in turn, meant that employment, which the Federal Reserve is closely monitoring for signs of a pullback, fell for the first time since June 2020, with the decline focused on services.
The survey suggests the economy lost momentum early in the second quarter compared to the January-March quarter. According to a Reuters poll of economists, gross domestic product (GDP) likely rose at an annual rate of 2.4 percent last quarter.
The United States continues to outperform its global counterparts, even though the Fed has raised interest rates by 5.25 points since March 2022 to control inflation.
The Fed has recently been spooked by a series of stronger-than-expected inflation and employment readings, which suggest that its fight to bring inflation back to the 2 percent target rate has stalled or even gone into overdrive. back.
Fed meeting approaching to announce interest rate decision
The Federal Reserve meets next week and is expected to keep the official interest rate at the current range of 5.25-5.50 percent.
Last week, a number of US central bank policymakers refrained from announcing at least one rate cut this year, saying only that recent data indicates that monetary policy needs to be tight for longer.
#business #activity #cools #April
– 2024-05-02 10:21:27
