Reports from the Institute for Supply Management found the US manufacturing sector contracted in November but economic activity in the US services sector grew.
Manufacturing PMI
The Institute for Supply Management’s Manufacturing ISM Report on Business found its measure of US manufacturing activity fell to a reading of 49.0% in November from 50.2% in October; however, the reading indicates the US economy as a whole still continues to expand.
The Manufacturing PMI report is based on a survey of manufacturing supply executives.
“The US manufacturing sector dipped into contraction, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began,” said Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee.
In addition, the measure of employment in the report contracted in November. It’s now at a reading of 48.4%, down from 50.0% in October.
The index indicated employment contracted after being unchanged for one month. Labor management sentiment continued to shift with a number of panelists saying their companies are reducing employment levels through hiring freezes, attrition and now layoffs, according to Fiore..
“In November, layoffs were mentioned in 14% of employment comments, up from 6% in October,” Fiore said. “Turnover rates remained consistent, with 30% of comments citing backfill and retirement issues, generally the same rate since September. For those companies expanding their workforces, comments continue to support an improving hiring environment.”
Services PMI
Economic activity in the US services sector grew in November for the 30th consecutive month, with the Institute for Supply Management reporting its Services PMI rose to a reading of 56.5% in November from 54.4% in October.
“Growth continues at a faster rate for the services sector, which has expanded for all but two of the last 154 months,” said Anthony Nieves, chair of the Institute for Supply Management. “The sector had an uptick in growth after pulling back in the previous two months. The rate of growth increased in November due to increases in business activity and employment.”
The employment activity measure in the services sector grew in November to a reading of 51.5% after contracting in October with a reading of 49.1%.
“A new fiscal period and the holiday season have contributed to stronger business activity and increased employment,” Nieves said.
The ISM index is based on data compiled from purchasing and supply executives across the US.
