The Economy Is Off to a Hot Start For Last Quarter of 2024

The growth of the U.S. economy appeared to accelerate in October, with both the services and manufacturing sides of the economy growing, an early read of S&P Global surveys of businesses showed Tuesday.

The S&P “flash” services-sector index rose to 50.9, the highest reading in three months and up from 50.1 in the prior month.

The manufacturing index climbed to 50, above the threshold dividing growth from contraction. This is the best reading in six months and above the 49.8 reading in the prior month. The index has been negative, indicating contraction, since last spring.

The S&P Global surveys are some of the earliest indicators of economic growth each month. The return to growth in the manufacturing index and the increase in the services index suggests that Federal Reserve officials may need to rethink their view that the economy would slow down in the fourth quarter.

Fed officials can take some comfort in the inflation components of the surveys, which indicated softer inflationary pressures. Several Fed officials have noted, however, that they do not believe that inflation will continue to fall if growth does not slow down.