US December PMI drops to multi-month low point, economic expansion momentum significantly slows down.

The latest release of the S&P Global PMI in the United States shows that in December, economic activity in the private sector is still in the expansion zone, but the expansion momentum has significantly slowed down, with several indicators hitting multi-month lows, signaling a weakening economic growth. Specifically, the December preliminary reading of the S&P Global Composite PMI came in at 53.0, a significant drop from November's 54.2, marking a new low in six months and below market expectations. Among the sub-indices, the Manufacturing PMI fell from 52.2 in November to 51.8, hitting a low in five months; while the Services PMI dropped from 54.1 to 52.9, setting a new low in six months, becoming the main factor dragging down the overall index. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that the December PMI preliminarily indicates that the previous momentum of economic growth in the United States is gradually fading. Survey data shows that the GDP growth rate for the fourth quarter is still expected to reach around 2.5% on an annual basis, but growth has been slowing for two consecutive months. With the holiday season approaching, new sales growth has significantly weakened, and economic activity may face further pressure in the coming months, cooling down as the new year approaches. Structurally, there are signs of weakening economic activity. Williamson stated that the influx of new business in the vast service sector has almost stagnated, while manufacturing has seen its first factory orders decline in a year. Despite some manufacturing companies reporting output increases, given the slowdown in sales, such production pace is considered unsustainable. If demand does not recover in the new year, companies may be forced to cut production. Meanwhile, service sector businesses reported that sales growth in December was one of the weakest months since 2013. Inflation pressures are also a concern. The survey shows that the rate of cost increases for businesses has risen to the highest level since November 2022, driving one of the most significant price increases in sales prices in nearly three years. Williamson pointed out that tariffs are once again widely seen by businesses as a key factor driving price increases, with their initial impact on manufacturing gradually spreading to the service sector, exacerbating overall affordability issues. On the financial market front, following the release of weak PMI data, the US dollar index came under pressure and fell by about 0.3% intraday to 97.96. Rising risk aversion has boosted the price of gold, with spot gold rising above $4330 per ounce to a daily high, indicating that investors' concerns about the US economic outlook and inflation trends are increasing.