US economic activity slows as manufacturing shrinks in September

The US economic activity slowed slightly in September, with growth gaps widening between sectors as manufacturing activity contracted at the deepest pace since June 2023.

The purchasing managers' index (PMI) fell to 54.4 points in September, from the previous month's reading of 54.6 points, which is the lowest level in two months, according to the preliminary reading in a survey by S&P Global.

The manufacturing PMI fell this month to 47 points, from 47.9 points in August, against expectations of a rise to 48.6 points, recording the lowest level of activity in the sector in 15 months.

The services PMI was down to 55.4 points in September, from the August reading of 55.7 points, against expectations of 55.3 points; the lowest level of activity in two months.

Data released Monday showed average prices for goods and services rose at the fastest pace since March, outpacing long-run averages prior to the pandemic, marking the first acceleration in inflation in four months.

The rising state of uncertainty ahead of the presidential election has caused companies to hold back on hiring, orders growth to slow at the deepest pace since December 2022 and business expectations for the year ahead to deteriorate to their lowest level in nearly two years.