US composite PMI slows as election uncertainty hits confidence

The expansion of business activity in the US private sector eased slightly in September, as robust growth in services was met with the steepest contraction in manufacturing for 15 months.

The S&P Global composite purchasing managers' index (PMI) released on Monday fell to 54.4 this month, down from 54.6 in August but more or less in line with the consensus forecast of 54.3.

The services PMI eased only slightly, to 55.4 from 55.7, but came in above the 55.2 reading expected by economists.

However, the manufacturing PMI fell to 47 from 47.9, missing the 48.5 estimate. This was the third straight reading below the key 50-point level which separates expansion from contraction and the lowest level since June 2023.

"A moderation of order book growth and a deterioration in business expectations for the year ahead to a near twoyear low meanwhile reflected heightened uncertainty ahead of the Presidential Election. Companies consequently held back on hiring and allowed employment to fall for a second successive month," the S&P Global survey read.

Optimism about output over the coming year deteriorated sharply,. with the survey's future output index dropping to its lowest since October 2022 and the second-lowest level seen since the pandemic.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that "intensifying political uncertainty" acted as a substantial headwind.

"Business sentiment, demand, hiring and investment are being subdued by uncertainty surrounding the Presidential Election, casting a shadow over the outlook for the year ahead at many firms."