Business activity in the US contracted in November

Business activity in the United States contracted for the fifth consecutive month in November, affected by the increase in interest rates that dampened demand.

For its part, business activity in the euro zone dipped slightly as the world braced for a year of recession, surveys showed on Wednesday.

S&P Global said its US Composite PMI Production Index, which tracks the manufacturing and service sectors, fell to 46.3 this month from a final reading of 48.2 in October. A reading below 50 indicates contraction in the private sector.

“Businesses are reporting increasing headwinds from rising cost of living, tightening financial conditions, particularly higher borrowing costs, and weakening demand in both the domestic and export markets,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Eurozone reduce descent

Elsewhere, the decline in business activity in the Eurozone eased slightly in November, offering a glimmer of hope that the expected recession in the area will be shallower than feared, but consumers continue to cut the price. spending amid the cost of living crisis.

There are growing signs that the bloc is entering a recession, and in a Reuters poll, economists gave a 78% chance of one occurring within a year.

The S&P Global Composite Purchasing Managers’ Index (PMI), considered a good indicator of overall economic health, rose to 47.8 points from 47.3 in October, beating expectations for a drop to 47 points in a Reuters poll.

“Today’s PMI data continues to show that the Eurozone has entered a recession; however, surveys point to a milder contraction compared to previous recessions,” said Paolo Grignani of Oxford Economics.

The downturn in German economic activity also eased in November, a sister survey showed, offering some hope that the expected downturn in Europe’s biggest economy could be milder than originally feared.

But in France, activity contracted for the first time since February 2021 as the decline in new orders hit the euro zone’s second-largest economy.

In the United Kingdom, outside the European Union, economic activity fell near its fastest pace in almost two years.