The latest released data shows that due to weak demand and rising costs, the number of private sector jobs in the United States has seen its first decline since June 2020.
On Friday (November 24th) in New York, a report released by financial analysis firm S&P Global showed that the initial value of the US manufacturing PMI in November dropped from 50.0 in October to 49.4, the lowest level in nearly three months and weaker than market expectations of 49.8. The manufacturing output index fell to a three-month low of 50.4.
The initial value of the Service Business Activity Index (PMI) rose from 50.6 to a four month high of 50.8, and the market had originally predicted that this data would drop to 50.4. This resulted in the initial value of the Comprehensive PMI Output Index (PMI) for November recording 50.7, which is consistent with the reading in October and did not decrease to 50.4 as expected by the market.
PMI is a barometer that measures the development status of the industry and reflects future economic trends through monthly surveys and summaries of procurement managers. The index usually has a critical point of 50, above which it indicates that a certain field is in an expanding state; If it is below 50, it indicates that the field is in a shrinking state.
Although the overall situation has slightly improved, the data also shows that employment in the service industry has declined for the first time since June 2020, and employment in the manufacturing industry has also shrunk for the second consecutive month. The report states that companies commonly refer to layoffs as a result of weakened demand and increased cost pressures.
Sian Jones, Chief Economist of S&P Global Markets Financial Intelligence, wrote in a report, "Due to concerns about the outlook, companies have experienced layoffs for the first time in nearly three and a half years. This phenomenon is not only occurring in the manufacturing industry, but service companies are also saying they are seeking cost savings."
Media analysis suggests that employment growth in the United States has always been a key factor in the economy, and the continued weakness of the labor market and increased layoffs may once again raise concerns about the 2024 economic recession.
The report also shows that the manufacturing industry is more optimistic about output prospects, but the service industry is less optimistic due to concerns about customer demand. The survey pointed out that companies have frozen recruitment due to profit compression, and the indicator for measuring investment costs has dropped to the lowest level since October 2020.