US S&P Global Composite PMI Flash (Mar) 51.4 vs. Exp. 50.5 (Prev. 51.9)

S&P's Williamson

• "...unwelcome combination of slower growth and rising inflation following the outbreak of war in the Middle East."
• "Companies are reporting a hit to demand from the additional uncertainty and cost of living impact generated by the conflict. Travel, transport and tourism related issues are compounded by financial market jitters and affordability constraints, notably including concern over the impact of higher interest rates, surging energy prices and supply chain delays."
• "Companies are meanwhile building safety stocks amid concerns that the war may lead to more protracted supply issues and price rises while trimming headcounts to reduce overheads."
• "...indicative of GDP rising at an annualized rate of just 1.0%, with a modest 1.3% expansion signalled for the first quarter as a whole. The survey’s price gauges meanwhile point to consumer price inflation accelerating back to around 4%, hinting at a growing risk of the US moving into an environment of stagflation."
• “The Fed will therefore need juggle these intensifying upside risks to inflation against the growing risk of the economy losing growth momentum, with much depending on the duration of the war and its impact on energy prices and global supply chains.”

• Overall, private-sector confidence declined, contributing to the first fall in employment in over a year.
• Average input costs meanwhile rose at a sharp rate again, posting the largest monthly increase for ten months and feeding through to the largest increase in average selling prices since August 2022