- The prelim was 58.5
- Previously it was 56.1
- Composite 55.4 vs 56.6 prelim
- The previous composite was 54.9
details:
- Employment increases for the first time in 5 months
- Business confidence at an 18-month high
- Cost inflation falls to 11-month low
This is still the best reading since March 2022, although not as good as it first appeared.
Chris Williamson, chief business economist at S&P Global Market Intelligence
“The US economy finished on a high in 2024 according to the latest business surveys. Business activity in the vast services economy rose in the final month of 2024 on the back of fuller order books and growing optimism about the outlook for the year ahead.
“Expectations for faster growth in the new year are based on the anticipation of more business-friendly policies from the incoming Trump administration, including a favorable tax and regulatory environment along with protectionism through tariffs.
“The improved performance of the service sector more than offset the continued burden on the economy from the manufacturing sector, meaning that survey data points to another strong expansion of the economy in the fourth quarter following GDP growth of 3.1% in the third quarter.”
“A strong services PMI reading for December sets the US economy off to a good start in 2025, but with growth this strong, it’s understandable that policymakers are taking a more cautious approach to lowering interest rates.” However, a key focus in the coming months will be the economy’s potential vulnerability to any major change in the interest rate outlook, particularly as financial services activity was an important driver of growth in late 2024, partly in anticipation of further reductions in borrowing costs.”
The lull could be due to a more dovish Fed and rising interest rates, or the political sheen of the election may already be wearing off.
This article was written by Adam Button at www.forexlive.com.
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