Business activity is plunging in Europe

A gauge of business activity in the U.S. continued to soar past pre-pandemic levels, while Europe's lockdown hurt its activity further in November, according to preliminary data from IHS Markit.

Why it matters: The index is a closely watched measure of the manufacturing and services sectors across the globe.

What they’re saying: “The eurozone economy has plunged back into a severe decline in November amid renewed efforts to quash the rising tide of COVID-19 infections,” Chris Williamson, an economist at IHS Markit, said in a release.

• “The data add to the likelihood that the euro area will see GDP contract again in the fourth quarter.”
• Yes, but: Germany's services and manufacturing sectors continued to expand, though activity slipped to the weakest level since July.

The other side: Business activity in the U.S. was the strongest in over five years.

• The survey showed the steepest monthly rise in employment among firms in the survey's 11-year history, although manufacturers reported slowing job creation.

What we're watching: U.S. firms also reported a record sharp rise in input costs, "as growing demand for inputs and supply shortages reportedly pushed supplier prices higher," the release said.

• Cost inflation in the services sector hit a survey high, while manufacturers' input costs soared at the fastest rate in over two years.

The bottom line: The survey of businesses was conducted as pharmaceutical companies reported encouraging trial data on coronavirus vaccines — pushing confidence among manufacturer and service firms higher in the eurozone.

• In the U.S., expectations about the coming year were the most upbeat in over six years, "reflecting the combination of a post-election lift to confidence and encouraging news that vaccines may allow a return to more normal business conditions in the not too distant future," per IHS Markit.