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The numbers: The service side of the U.S. economy grew faster at the end of the year while manufacturers remained mired in a slump, a pair of S&P business surveys showed.
The S&P flash U.S. services PMI rose to a five-month high of 51.3 in November, from 50.8 in the prior month.
The flash U.S. manufacturing PMI, however, fell to a four-month low of 48.2 from 49.4 in the prior month.
Numbers above 50 signal growth, and numbers below that signal contraction.
Big picture: The so-called flash readings reflect the persistence of a dual-track economy.
Services have flourished as people go out to eat more and spend more on travel and entertainment. Consumers have cut back, however, on purchases of goods, especially big-ticket items, in part because of higher interest rates.
Manufacturers have seen a drop in demand in light of the shift in consumer spending. High interest rates have also acted as a drag on investment.
The bifurcated economy is likely to persist until interest rates decline sharply and the U.S. is no longer in danger of a recession.
Looking ahead: “The early PMI data indicate that the U.S. economy picked
up a little momentum in December, closing off the year with the fastest growth recorded since July,” said S&P business economist Chris Williamson.
“Despite the December upturn, the survey therefore signals only weak [gross domestic product] growth in the fourth quarter,” he said.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Friday trades.
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