US business activity remains in expansion, prices post largest increase since 2022

US business activity growth slowed slightly in October but remained close to a multi-year high, with strong demand driving up new orders, employment and prices. Data released Friday showed the S&P Global flash October composite purchasing managers index fell 0.8 points to 57.6. That is the second-highest level since 2022. A reading above 50 indicates expansion. The selling price gauge rose at the fastest pace in more than four years, reflecting sharp increases in energy, transportation and raw material costs. "Cost pressures remain a major concern, especially with the impact of the renewed oil price surge feeding through to a broad range of goods and services," Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement. Supply bottlenecks are also worsening. Supplier delivery times lengthened by the most since 2022, which S&P Global attributed to material and labor shortages, suppliers operating above capacity and transportation delays. Even so, Williamson said that excluding the post-pandemic reopening period, US businesses are experiencing their strongest stretch of growth since 2015. Strong consumer spending, AI-driven investment and defense spending have all supported US businesses this year. The new orders gauge, a measure of demand, posted its fastest growth rate in four and a half years in October.