The US services purchasing managers’ index rose from 54.4 to 56.5 points in November. The services sector thus remains resilient in the face of interest rate rises. Better-than-expected data, however, may mean a more significant increase in interest rates by the US central bank.
America’s service sector is immune to economic crisis
The November index of purchasing managers in services in the US suggests the services sector is extremely resilient to the ongoing economic downturn and interest rate rises. Economists surveyed by Reuters had expected the Services Purchasing Managers’ Index to fall from October’s 54.4 to November’s 53.1 points. However, the index was ultimately higher by 3.4 points.
US could avoid recession
Better-than-expected results have heightened optimism and expectations that the US economy may be able to avoid a recession next year. Instead, there may only be a reduction in the rate of GDP growth. However, the final level of interest rates remains the uncertainty. It is precisely their further sharper growth that investors are betting, who read the report of an increase in the Purchasing Managers’ Index as the Fed’s reason for a more severe rate hike than it has declared so far. The dollar firmed against both the euro, yen and British pound in response.
