Us Business Activity Improved December

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Us Business Activity Improved December

US Business Activity Reached 51.0 In December, According to S&P Global

The latest PMI reading from the S&P Global shows an uptick in business activity during December. Overall, the US economy showed an improvement in business activity on account of higher demand for workers, along with an increase in orders.

The recent improvement in business activity will be helpful in easing some of the fears that the 4th quarter was going to be a bad one for the economy.

Business Activity Shows Positive Growth

The PMI output index showed a reading of 51.0 in December from an earlier reading of 50.7. This index highlights that the output from the services & manufacturing sectors of the USA has improved. In addition, the reading also shows growth as it is marginally higher than the 50, which is regarded as a neutral level.

However, the bulk of the improvement in the business activity was driven by the services sector. The US manufacturing sector continues to decline as there is still no sight of rate cuts from the Fed.

A few days earlier, several indicators also showed an improvement in the labor market. That's why it is safe to say that the data coming from the US before the holiday season is pretty strong. So it shouldn't come as too much of a surprise if the US indices turn higher in the last days of the year.

An improvement in the PMI reading also pushed the Federal Reserve officials from Atlanta to improve the GDP estimate to around 2.6% from an earlier value of 1.2%.

According to officials, the data shows that the momentum has increased in the US economy. As for what enables the change, the officials believe it is tied to monetary easing and better financial conditions.

After the reading, several economists now believe that the US economy will not undergo a recession in 2024. A few days earlier, the comments from the Fed showed that the rate hike campaign that lasted for several years had finally reached its peak.

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