- Prior month manufacturing 48.5. Prior month services 55.0
- S&P global flash manufacturing index 48.8 vs 48.8 estimate
- S&P global flash services index 57.0 vs 55.2 estimate. Best since March 2022
- Composite 55.3 vs 54.1 last month
Future Sentiment:
- Future output optimism rebounded for the second consecutive month in November, reaching the highest level since May 2022.
- Manufacturing sector optimism hit a 31-month high, suggesting potential for more balanced economic expansion.
- Improved sentiment attributed to reduced political uncertainty following the US Presidential Election.
- Expectations of lower interest rates, lower inflation, and better economic conditions contributed to positive outlooks.
- A more business-friendly incoming administration, with expectations of looser regulations and protection measures, boosted optimism, particularly in manufacturing.
Employment
- Employment declined for the fourth consecutive month in November, with job losses reaching a three-month high.
- The services sector saw an increased rate of payroll reductions.
- Manufacturing jobs rose for the first time in four months, partially offsetting losses in the services sector.
- The decline in overall employment contrasts with improved business confidence about the year ahead.
Prices:
- Average prices for goods and services rose modestly in November, with inflation at its lowest since June 2020.
- Inflation remained below the pre-pandemic long-run average.
- Services sector inflation moderated significantly, with prices rising marginally at the slowest rate since May 2020.
- Manufacturing selling prices increased slightly, showing a minor uptick in inflation
From Chris Williamson, Chief Business Economist at S&P Global Market Intelligence
The business mood has brightened in November, with confidence about the year ahead hitting a two-and-a-half year high. The prospect of lower interest rates and a more probusiness approach from the incoming administration has fueled greater optimism, in turn helping drive output and order book inflows higher in November. The rise in the headline flash PMI indicates that economic growth is accelerating in the fourth quarter, while at the same time inflationary pressures are cooling. The survey's price gauge covering goods and services signalled only a marginal increase in prices in November, pointing to consumer inflation running well below the Fed's 2% target.
A concern is that growth remains heavily reliant on the services economy, with manufacturing production declining at an increased rate. However, the promise of greater protectionism and tariffs has helped lift confidence in the US good producing sector, which is already feeding through to higher factory employment. Factories are meanwhile stepping up their purchases of imported inputs as they seek to front-run tariffs, putting pressure on supply chains to a degree not seen for over two years. Any further stretching of these supply lines could see prices move higher as demand outstrips supply.
The USD has moved higher on the better data:
- USDJPY is testing the 200 hour MA at 154.95. Move above it and the 155.00 and the buyers are back in control in the short term. .
- EURUSD moved lower and away from the 38.2% of the week's trading range at 1.04697. The price is testing the 50% midpoint of the range since 2022.
