U.S. business activity picked up in December amid rising orders and demand for workers, which could further help to allay fears of a sharp slowdown in economic growth in the fourth quarter.
S&P Global said on Friday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to a five-month high of 51.0 this month from 50.7 in November. A reading above 50 indicates expansion in the private sector.
All the improvement came from the services sector, with manufacturing activity declining further. The survey followed upbeat news on the labor market in November. The holiday shopping season also got off to a strong start, with retail sales outperforming expectations in November, data showed on December 21.
The run of better-than-expected data prompted the Atlanta Federal Reserve to boost its gross domestic product growth estimate to a 2.6% annualized rate from a 1.2% pace. The economy accelerated at a 5.2% rate in the third quarter.
“The early PMI data indicate that the U.S. economy picked up a little momentum in December,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Looser financial conditions have helped boost demand … and have also helped lift future output expectations higher.” Source: Reuters