US business activity rises to 11-month high in April: S&P Global survey

Business activity in the United States accelerated to an 11-month high in April, according to a survey on Friday, contrasting with growing signs that the economy was in danger of slipping into recession as higher interest rates cool. the demand.

S&P Global said its US Composite PMI Exit Index, which tracks the manufacturing and services sectors, rose to 53.5 this month. That was the highest level since last May and followed a final reading of 52.3 in March.

It was the third straight month that the PMI had stayed above 50, indicating growth in the private sector. The survey data was collected from April 12 to 20.

But the so-called hard data paints an increasingly darker picture. The job market is cooling, retail sales are falling and manufacturing production is slumping, leading most economists to forecast a recession as early as the second half of the year.

Banks have tightened lending, which could make credit less accessible for households and small businesses. Surveys from the Institute for Supply Management, which has a longer history, have suggested a loss of momentum in the vast service sector in March and a significant deterioration in manufacturing conditions.

“Business expectations among US companies remained upbeat through April, with confidence in the outlook for the coming year rising to the second highest since May 2022,” S&P Global said in a statement.

The survey measure of new orders received by private companies rose to 53.2 this month, also the highest reading since last May, from 50.8 in March. The increase, which was in the services and manufacturing sectors, meant that inflationary pressures increased this month. The survey measure of prices paid by businesses for inputs rose to 61.2 from 59.8 in March.

“This rise helps explain why core inflation has been stubbornly elevated at 5.6% and points to a possible pick-up, or at least some sticking, in consumer price inflation,” said Chris Williamson, chief economist. business of S&P Global Market Intelligence.

Companies also increased the number of employees, with companies reporting that job openings were more easily filled.

The survey’s preliminary services sector PMI rose to 53.7, the highest reading in a year, from 52.6 in March. Economists polled by Reuters had forecast the services PMI to fall to 51.5.