U.S. business activity strengthened again in November, marking a second month of accelerating growth even as companies reported rising cost pressures tied to tariffs, according to new “flash” data from S&P Global.
The Flash U.S. Composite PMI Output Index inched up to 54.8, from 54.6 in October, the highest reading since July and the 34th consecutive month of expansion. The data signal annualized fourth-quarter GDP growth of 2.5%, S&P Global said.
Services continued to lead the expansion. The Flash Services Business Activity Index rose to 55.0, a four-month high, reflecting the strongest increase in new business this year. Manufacturing grew more slowly: the Manufacturing Output Index slipped to 53.6 from 53.7, and the broader Flash Manufacturing PMI fell to 51.9 from 52.5, a four-month low.
“The flash PMI data point to a relatively buoyant US economy in November,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. Growth, he added, appears “encouragingly broad-based,” with both services and goods producers reporting higher output. Williamson also noted a “marked uplift” in business confidence as concerns eased around the political environment and the end of the government shutdown.
Still, several warning signs emerged. Manufacturers reported the largest buildup of unsold finished goods since the survey began 18 years ago, a consequence of sharply slower new-order growth and a fifth straight monthly drop in export demand. The pileup of inventory, S&P Global warned, could drag on production in the months ahead if orders do not recover.
Inflationary pressures also intensified. Input costs rose at one of the fastest rates in three years, driven primarily by tariffs and higher wages. Service-sector cost inflation reached its highest level since early 2023. While selling-price inflation remained below recent peaks, services firms reported a renewed acceleration even as manufacturers saw some easing.
Hiring continued but remained restrained. Businesses added staff for the 11th time in 12 months, though job growth was modest as firms cited cost controls, efficiency efforts and difficulty filling vacancies. Manufacturers increased hiring at the fastest rate since August, while service-sector hiring slowed.
Despite the mixed signals, business confidence improved sharply. Expectations for output over the next year climbed to the highest level since January, with firms citing increased customer inquiries and hopes for lower interest rates and additional policy support.
Final PMI data for November is due Dec. 1 for manufacturing and Dec. 3 for services and the composite index.
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