US business activity slows in October as inflation risks persist

US business activity experienced a slight deceleration in October, according to S&P Global's preliminary composite PMI, which fell to 57.6 points from September's five-year high of 58.4. Despite the slowdown, a reading above 50 indicates continued expansion in the private sector.

Strong demand has allowed companies to raise prices for goods and services, suggesting that inflation may remain elevated in the coming months. While the manufacturing sector showed strength, it was partially offset by a slight retreat in the services sector. New orders rose to 58.2 points, the highest level since March 2022.

Economists anticipate that preliminary GDP data will show annual growth of approximately 3.0 percent for the last quarter, driven by consumer spending and artificial intelligence investment. However, experts warned that inflationary pressures stemming from prolonged conflict in the Middle East could slow consumer spending this quarter.