The numbers: The U.S. economy lost some momentum toward the end of summer as rising interest rates and still-high inflation took a bite out of growth, a pair of S&P surveys showed.
The S&P flash U.S. services-sector index slipped to an eight-month low of 50.2 from 50.5 in the prior month. Most Americans are employed on the service side of the economy, in areas such as health care, retail and hospitality.
The S&P U.S. manufacturing-sector index, meanwhile, rose slightly to 48.9 from 47.9, leaving it in negative territory.
The S&P Global surveys are among the first indicators each month to provide an assessment of the health of the economy. Any number above 50 signals expansion, while numbers below 50 point to contraction.
One caveat: The S&P surveys have consistently shown the economy to be weaker than other measures of U.S. growth.
Key details: New orders, a sign of future demand, fell at the “strongest pace this year,” S&P said.
In a more positive sign, however, businesses hired more people. That’s a sign demand remains fairly steady.
Inflation intensified a bit, executives said, reflecting in part higher energy prices. but inflation was considerably lower compared to a year ago.
Manufacturers were a bit more upbeat.
Big picture: The large service side of the economy has fueled an ongoing expansion and kept the U.S. out of recession.
Manufacturers have lagged behind, and the strike by unionized auto workers could act as another drag.
While the S&P indicators suggest worsening conditions, other reports suggest the economy is still on sold footing
Looking ahead: The survey added to concerns regarding the trajectory of demand conditions in the U.S. economy following interest-rate hikes and elevated inflation,” said Siân Jones, principal economist at S&P Global Market Intelligence.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were mixed in Thursday trades.
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