• By The Financial District

U.S. BUSINESS ACTIVITY FALLS TO 3-MONTH LOW

IHS Markit's gauge of US business activity fell to 55.7 from 58.6 in an early December reading, marking its lowest level in three months, Ben Winck reported for BusinessInsider.

Softened activity in the services industry weighed on the broader index as stricter lockdown measures and rising COVID-19 cases slammed demand. IHS's purchasing managers' index for the manufacturing industry fared far better, falling just 0.2 points to 56.5 this month.


"Vaccine developments mean some of the cloud caused by the pandemic should lift" in 2021, but the current state of the pandemic worsens the economy's near-term outlook, Chris Williamson, the chief business economist at IHS Markit, said.


A key measure of US economic activity snapped a two-month streak of improvements as soaring COVID-19 case counts prompted new restrictions in December.


IHS Markit's flash composite index of US business activity fell to 55.7 from 58.6 this month, according to a Wednesday release. The reading marks the gauge's lowest level since September. Still, readings above 50 indicate overall growth.


A slowdown in services dragged on the broader index. IHS's flash index of service-industry activity fell to a three-month low of 55.3 from 58.4 as renewed lockdowns weakened demand. Input prices climbed as firms shouldered the costs of additional PPE and stronger inflation.


November saw the Thanksgiving holiday lift business confidence, but stricter economic restrictions are now reversing some of those gains, Chris Williamson, the chief business economist at IHS Markit, said. "While vaccine developments mean some of the cloud caused by the pandemic should lift as we head through 2021, rising case numbers continue to darken the near-term outlook," he added.



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