High inflation hardly slows down US service providers
The growth rate of service providers in the US is still high despite the high prices.
Experts polled by Reuters had expected a stronger decline to 56.0 points.
Photo: Getty Images
Surprisingly, US service providers maintained their robust growth pace in September. The Purchasing Managers’ Index fell only marginally to 56.7 from 56.9 in August, according to the company’s survey conducted by the Institute of Supply Management (ISM) on Wednesday. Experts polled by Reuters had expected a stronger decline to 56.0 points. Growth threshold is 50 points. Helaba economist Ulrich Wortberg notes that although the mood in the services sector has cooled somewhat, the metric is still showing clear signs of expansion.
Against this background, the US economy is still in growth mode despite the high prices. “Despite the increased risks, there is no reason for the US Federal Reserve to deviate from its planned rate hike path for the time being,” the expert explained. The US inflation rate, at 8.3% recently, is well above the 2.0% mark targeted by the Federal Reserve. So the Fed is raising the base rate in big strides in order to counter the upward pressure on prices. It has already raised the benchmark interest rate three times in a row by three-quarters of a percentage point – most recently to the 3.00 to 3.25% range.
Reuters
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