The S&P Global Flash US PMI® Composite Output Index jumped to a 33-month high of 56.6 in November from an upwardly revised 54.9 in October. The services sector fueled the increase as the S&P Global US Services (PMI®) reached a 38-month high of 58.5 from an upwardly revised 56.1. Conversely, manufacturing output declined as the S&P Global US Manufacturing (PMI®) reported at a 55-month low of 46.0. The sector is said to be expanding if the reading is above 50 and contracting if it is below 50. Despite the manufacturing slump, overall business activity increased for the first time in five months due to a rise in employment and an increase in new orders. Services saw a decrease in inflationary pressure, while manufacturing saw an increase. Following the presidential election, optimism about future production increased, but worries about tariffs and inflation, particularly in manufacturing, remain.

The Commerce Department reported advance U.S. retail and food services sales increased to $724.6 billion in November, a (+0.7%) increase; this follows a revised increase of (+0.5%) for October. Retail sales were up (+3.8%) year over year. Total sales for September 2024 through November 2024 were up (+2.9%) year over year. Retail sales are mostly goods and are not adjusted for inflation. Excluding sales at motor vehicle, parts, and gasoline stations, sales were up (+0.2%). Motor vehicle & parts dealers (+2.6%) and internet retail (+1.8%) led the way in sales increases, while miscellaneous stores (-3.5%) and department stores (-0.6%) led in sales declines. Restaurants, the only service category, reported down (-0.4%). Core retail sales, a measurement that excludes spending on autos, gasoline, building materials, and food services, rose (+0.4%) in November and follows an unrevised (-0.1%) reading the previous month.

The Federal Open Market Committee (FOMC) announced that it will lower the federal funds rate by 0.25 percentage points to a range of 4.25% to 4.50%, marking the third consecutive reduction. The FOMC statement was little changed from November, stating, “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” The FOMC’s latest quarterly economic projections show that the economy is expected to end the year growing 2.5%, a half percentage point higher than September's projection, and that the unemployment rate will finish at 4.2%. The PCE inflation forecast was increased to 2.4% for 2024, while core PCE inflation was increased to 2.8%. The FOMC indicated fewer rate reductions were ahead as the median federal funds rate was increased to 3.9% from 3.4% for 2025, then 3.4% for 2026 and 3.1% for 2027.