Business activity picks up in the US in October; Shortage damages factories, shows IHS Markit

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Lucia Mutikani. By

WASHINGTON (Reuters) – Business activity in the US posted solid growth in October, suggesting economic growth accelerated in the fourth quarter as Covid-19 infections eased, despite labor shortages and limited raw material production .

Data provider IHS Markit said on Friday that the preliminary reading of its composite PMI index, which tracks the manufacturing and services sectors, jumped from 55.0 in September to 57.3 in the first half of this month. Figures above 50 indicate growth in the private sector.

The resurgence of coronavirus infections, driven by Delta Edition, has weighed on demand for services in consumer-facing businesses such as restaurants, hotels and air travel. The outbreak of infection along with shortages in almost every sector has disrupted economic activity.

Gross domestic product (GDP) growth for the third quarter is mostly projected below an annualized rate of 3%. The economy grew 6.7% in the second quarter.

The government will release the preliminary third quarter GDP data on Thursday.

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