Private-Sector Growth Eases as Employment Rises, Price Pressures Intensify

01:40 PM EDT, 10/23/2026 (MT Newswires) -- US private-sector growth eased in October, while employment increased and selling prices rose at the sharpest rate since August 2022, S&P Global's (SPGI) flash purchasing managers' index showed Friday. The composite output index fell to a two-month low of 57.6 this month from 58.4 in September, but still indicated the second-sharpest increase in business activity since March 2022, according to the data provider. The latest print matched the consensus in a survey compiled by Bloomberg. "October's flash PMI data indicate that the US economy continues to boom at the start of the fourth quarter," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "The output readings from the survey are consistent with (gross domestic product) growing at a 5% annualized rate after a 4% expansion was signaled for the third quarter." The manufacturing PMI reached a 53-month high in October at 56, up from 55.9 last month, while the services activity index fell to a two-month low of 57.9 from 58.8. New orders growth was the highest in more than 4.5 years, the survey showed. "Especially healthy corporate earnings and profits are also indicated, and hiring has surged as companies seek to boost capacity to fulfil stronger customer demand," Williamson said. "If the reopening of the economy after COVID is excluded, recent months have seen the best growth spell for US businesses since early 2015." Employment rose at the second fastest rate in more than four years this month as firms ramped up capacity to meet demand. However, selling prices increased at the sharpest pace since August 2022 as companies looked to pass on steep gains in costs to customers, the survey showed. "Cost pressures remain a key concern, notably as the renewed surge in oil prices reverberates through to impact a wide variety of goods and services," Williamson said. The sharp increase in selling prices indicates consumer inflation is expected to rise further above the Federal Reserve's target in the months ahead, he said. Separately, a survey by the University of Michigan showed Friday that US consumer sentiment hit its lowest level in five months in October as inflation expectations hit the highest since May. Markets are pricing in a roughly 89% probability that the Fed will leave its benchmark lending rate unchanged next week, according to the CME FedWatch tool. The remaining odds point to a second consecutive 25-basis-point interest rate increase as the central banks looks to curb inflation. Business output expectations for the year ahead cooled sequentially in October, but were still the second highest seen this year, the S&P survey showed Friday. Price: 450.53, Change: -2.57, Percent Change: -0.57