US business activity reportedly contracted in September for the third month in a row, albeit at a more modest pace. This comes amid rising orders and weaker inflation allaying fears of a sharper pullback.
The S&P Global flash composite purchasing managers' output index rose 4.7 points to a three-month high of 49.3, based on a report released earlier. A reading below 50 indicates contraction. A composite measure of service provider and manufacturer orders rose to a four-month high.
The improvement in bookings shows demand is holding back but remains weak as service providers' customers adjust to increased prices and higher interest rates.
Although input cost inflation has eased, it remains "elevated by standards and with business activity slowing", the survey found a small probability of the economy struggling in stagflation", said Chris Williamson, chief business economist at S&P Global Intelligence.
On the other hand, the group's input price composite declined to its lowest level since January 2021. A measure of charged prices also showed slower growth, but at a lower level than inputs as manufacturers sought to pass on high costs to customers.
The group's business activity index among services rose to 49.2 in September, still showing contraction but at the most moderate pace in three months. The manufacturing sector grew at a slightly faster pace than a month earlier.
The US dollar index, which measures the US dollar against six major currencies, traded up 1.31% to trade at 112,570.
