U.S. Services Sector Growth Cooled Slightly in November -- IHS Markit
By Xavier Fontdegloria
The U.S. service sector growth slowed slightly in November as
supply and labor strains continued to hamper activity, data from a
survey of purchasing managers showed Friday.
The final U.S. Services Purchasing Managers' Index compiled by
IHS Markit stood at 58.0 in November, down from 58.7 in October,
but higher than the preliminary estimate of 57.0 and the 57.1
forecast from economists polled by The Wall Street Journal.
The indicator suggests that the U.S. services sector continued
to expand as it came in above the 50-point threshold that separates
expansion from contraction, but the PMI also suggested that the
growth pace softened slightly compared with the previous month.
U.S. business activity continued to grow at a solid rate in
November, adding to signs that the pace of economic growth is
accelerating in the fourth quarter, said Chris Williamson, chief
business economist at IHS Markit.
"While growth is not matching the surge seen earlier in the year
when the economy reopened, the fourth-quarter expansion should be
well above the economy's long-run trend to mark a solid end to the
year," he said.
Services providers noted higher output and new orders, mainly
stemming from the recovery of client demand following the Covid-19
pandemic. However, others reported that the resurgence of the virus
and supply-chain problems acted as deterrents to customers placing
orders, the report said.
Cost pressures in the service sector also spiked higher in
November, with companies reporting higher prices paid for inputs
and staff due to shortages.
IHS Markit said the Composite PMI Index--which combines
manufacturing and services sectors--decreased to 57.2 in November
from 57.6 in October. Output was led by the service sector as
factories were hampered by supply-chain disruptions, IHS Markit
Business expectations for the year ahead rose in November, but
the survey didn't fully capture the effect from recent news about
the Covid-19 Omicron variant.
"[The Omicron variant] casts a renewed shadow of uncertainty
over the outlook for business and poses a downside risk to
near-term growth prospects," Mr. Williamson said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
December 03, 2021 10:18 ET (15:18 GMT)
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