US: Markit Services PMI drops more than expected to 57.0, lowest in two months; Manufacturing rises to 59.1

• US HIS Markit flash for November shows mixed data.
• US Service Index drops to lowest in two months.
• US Manufacturing Index rises more than expected to 59.1.

The preliminary reading of the HIS Markit showed mixed signs in November. The Manufacturing Index rose more than expected to 59.1, the highest in two months. The Service sector Index fell unexpectedly to 57 from 58.7, against market consensus of 59.1.

Meanwhile, the Composite PMI dropped from 57.6 in October to 56.5 in November, below the market consensus of 57.4.

“Private sector firms signalled a sharp upturn in business activity during November, despite the rate of expansion slowing from October. Softer overall growth was largely led by the service sector, as manufacturers posted a slightly stronger increase in production. Nevertheless, pressure on capacity remained stark as labour and material shortages weighed on the private sector”, the report mentioned.

Chris Williamson, Chief Business Economist at IHS Markit, considered the US economy continues to run hot. “Despite a slower rate of expansion of business activity in November, growth remains above the survey’s long-run pre-pandemic average as companies continue to focus on boosting capacity to meet rising demand.” He added the slowdown “underscores how the economy is struggling to cope with ongoing supply constraints.”