A preliminary S&P Global survey showed Friday that U.S. business activity stayed near a five-year high in October, with strong demand and hiring alongside the fastest rise in selling prices since August 2022.
The preliminary composite output index fell to 57.6 from September’s 58.4, but remained well above 50. A reading above 50 signals growth. Manufacturing strengthened slightly, with its activity index rising to 56.0.
Services activity eased to 57.9 from 58.8. Growth slowed in both sectors, but new orders rose at their fastest pace in more than four and a half years. Domestic demand and stronger exports supported the increase in new orders.
Employment also rose at the second-fastest rate in more than four years. Businesses sought workers to meet demand and handle growing amounts of unfinished work. But the survey pointed to growing cost pressure on companies.
Selling prices rose at their sharpest rate since August 2022, amid higher costs for the goods and services companies use and worsening problems that slowed supply chains. The results suggest the economy began the fourth quarter with considerable momentum. Renewed price pressure poses a risk to the inflation outlook.
The PMI is an early survey signal, not an official measure of economic output or inflation.