US manufacturing slipped to a four-month low in November as tariffs pushed up prices and dampened demand. According to news agency Reuters, the slowdown caused a build-up of unsold goods, raising concerns that it may drag down wider economic growth.
Manufacturing hit by rising prices and weak demand
S&P Global said the flash US manufacturing PMI eased to 51.9 from 52.5 in October, with new orders dropping to 51.3 and inventories rising to the highest level recorded in the survey. Chris Williamson of S&P Global Market Intelligence said manufacturers faced “a worrying combination of slower new orders growth and a record rise in finished goods stock,” cautioning that output may weaken further unless demand revives.
Tariffs squeeze households, sentiment weakens
Reuters reported that consumers are increasingly reluctant to buy long-lasting manufactured goods. The University of Michigan’s latest survey showed a sharp fall in purchasing conditions, adding that “consumers remain frustrated about the persistence of high prices and weakening incomes.” US President Donald Trump’s tariffs have pushed up import costs, placing additional pressure on lower- and middle-income families. A recent stock-market sell-off has also dented confidence among wealthier Americans, who had earlier supported spending. Economist Sung Won Sohn was quoted by Reuters as saying that those at the lower-income end “will probably not spend very much,” adding that uncertainty in markets “is going to hurt even the spending of wealthier people, especially retirees.”
Services sector keeps overall activity steady
Despite the factory-sector slowdown, broader business activity remained solid. The US Composite PMI Output Index rose to 54.8, supported by a stronger services sector. Reuters reported that services PMI climbed to 55.0, driven by better new business orders and improved confidence linked to expectations of further rate cuts, the end of the 43-day government shutdown and easing political concerns. Consumer sentiment inched up to 51 in the University of Michigan survey, though it stayed below October’s level. Joanne Hsu, who heads the survey, said sentiment among households with large stock holdings dropped due to late-month market declines.Inflation pressures remained elevated, with businesses reporting higher input costs and increased prices for goods and services. Consumers also expect stronger inflation in the next year, Reuters said, even as five-year expectations eased slightly to 3.4%. Though the PMI suggested no sharp deterioration in the labour market, hiring softened marginally, with private-sector employment slipping to 51.0 amid tariff-related cost concerns.
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