Having fallen for the last 3-4 months, as ISM’s surveys have rebounded, Markit’s Manufacturing and Services PMIs were expected to bounce modestly in the flash September print (after Europe’s composite PMI fell disappointingly).
However, Markit reported a mixed picture for September with Services collapsing to the lowest since March 2017 and Manufacturing rebounding… as it seems Services is catching down to the reality of dismal ‘hard data’.
Markit US Manufacturing 55.6 vs 55.0 exp
Markit US Services 52.9 vs 55.0 exp.
The Composite Index slipped to its weakest since April 2017…
Comment Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
“With storms hitting the east coast, it was no surprise to see some disappointing survey data in September, with the flash PMI indicating that the pace of economic growth slipped to its lowest for almost one-and-a-half years.
“However, business activity remained encouragingly resilient during the month, commensurate with third quarter GDP growing at an annualised rate approaching 3%.
“Growth may well pick up again as we move into the fourth quarter. With new orders growth accelerating and backlogs of work rising due to weather-related disruptions, the survey data suggest underlying demand remains robust and that there’s an accumulation of work that will roll over into stronger economic growth in coming months.
“Most encouraging was an upturn in hiring. The survey’s employment gauge rose to a level indicative of non-farm payroll growth topping 200,000 in September.
“On the downside, prices charged spiked higher again during the month, rising at the steepest rate seen for at least nine years, as supply shortages and rising costs, often linked to tariffs, fed through to selling prices.
“The escalation of trade wars, and the accompanying rise in prices, contributed to a darkening of the outlook, with business expectations for the year ahead dropping sharply during the month. While business activity may rebound after the storms, the drop in optimism suggests the longer term outlook has deteriorated, at least in the sense that growth may have peaked.”
Following Eurozone’s disappointment, it seems global growth is slowing…