US Services and Manufacturing Output in September Falls at Softer Pace

The S&P Global Flash US Services Business Activity Index posted 49.2 in September, up sharply from 43.7 August to signal a much slower decline in output. The fall in business activity the softest for three months as a pickup in new orders and client demand dampened the contraction. S&P Global flash US Manufacturing PMI rose to 51.8 in September of 2022 from 51.5 in August, above consensus forecasts of 51. This remains just above the lowest growth in factory activity since July of 2020, hit by supply constraints and rampant inflation. The economy has been hit by stifled demand conditions and production cutbacks. The surging US dollar added to prices pressures for customers.

US manufacturing Workers
ISM Manufacturing June 2022

Higher input prices dampened customer demand, as some firms stated that clients were monitoring inventories and essential spending more closely. The hope is improved supply chain conditions; the question is does the Ukraine Russian war flow on allow for any gains?

A number above 50.0% is indicative of expansion. 


  • Flash US PMI Composite Output Index at 49.3 (August: 44.6). 3-month high, est 46.1
  • Flash US Services Business Activity Index at 49.2 (August: 43.7). 3-month high. est 45.5
  • Flash US Manufacturing Output Index at 49.5 (August: 49.2). 2-month high.
  • Flash US Manufacturing PMI at 51.8 (August: 51.5). 2-month high, est 51.0
  • Data were collected 07-22 September
United States Manufacturing PMI

Commenting on the flash PMI data, Siân Jones, Senior Economist at S&P Global Market Intelligence said:

US businesses are reporting a third consecutive monthly fall in output during September, rounding off the weakest quarter for the economy since the global financial crisis if the pandemic lockdowns of early-2020 are excluded.

However, while output declined in both manufacturing and services during September, in both cases the rate of contraction moderated compared to August, notably in services, with orders books returning to modest growth, allaying some concerns about the depth of the current downturn.

“There was also better news on inflation, with supplier shortages easing to the lowest since October 2020,
helping take some of the pressure off raw material prices. These improved supply chains, accompanied by the marked softening of demand since earlier in the year, helped cool overall the rate of inflation of both firms’ costs and average selling prices for goods and services to the lowest since early-2021.

“Inflation pressures nevertheless remain elevated by historical standards and, with business activity in decline, the surveys continue to paint a broad picture of an economy struggling in a stagflationary environment.

Source: S&P Global

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