S&P Global has released a new report indicating that the United States economy is experiencing its strongest expansion in nearly a year. In April, the company’s composite PMI reached 53.5, up from 52.3 in March and marking the highest reading since May 2022. Any reading above 50 indicates economic expansion, while readings below 50 indicate economic contraction. According to Chris Williamson, chief business economist at S&P Global Market Intelligence, “the most recent survey adds to indications that business activity has regained growth momentum after contracting in the seven months preceding January.”
The Services and Manufacturing PMIs are Rising.
The S&P report also highlights that the business activity index for the services sector increased to 53.7 from 52.6 last month. S&P’s manufacturing index reached its highest level in six months when it reached 50.4, up from 49.2 in March. Williamson added that the broad-based growth is due to a post-pandemic shift in spending away from commodities.
The rate of employment expansion has accelerated.
Williamson stated that employment growth has accelerated alongside the resurgence of demand, facilitated by reports of vacancies being more easily filled as a result of an increase in the number of qualified candidates and higher wages. In April, S&P Global’s preliminary reading on US economic activity reached its highest level in 11 months, while the survey’s reading on activity in the services sector reached its highest level in 12 months.
A Potential Recession in the United States?
In a survey conducted by Bloomberg last month, economists predicted a 65% possibility of an economic downturn within the next 12 months. Despite some concerns about a recession, Friday’s report from S&P Global contradicts this narrative by demonstrating that the US economy is actually experiencing its strongest expansion in nearly a year.
In less than two weeks, the Federal Reserve is scheduled to hold its next policy meeting, at which the central bank is anticipated to raise interest rates by 0.25 percentage points. Despite concerns about the banking sector that shook markets in March, the Fed’s Beige Book report, which compiles anecdotes from business contacts across the nation, revealed that economic activity has remained stable in recent weeks.
source: ©Spencer Platt/Getty Images ; Yahoo Finance
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