U.S. Markit Manufacturing PMI shrank again in October
On Thursday, October 24th, data released by S&P Global indicated that due to strong demand in the service sector, business activity in the United States maintained robust growth for most of October, with expectations rebounding to a high not seen in over two years. However, the manufacturing sector has been in contraction for the third consecutive month, albeit with a slight deceleration in the rate of decline.
The United States' October Markit Manufacturing, Services, and Composite PMI all warmed up compared to September, setting a two-month high, with 50 being the dividing line between expansion and contraction.
The preliminary value of the United States' October Markit Manufacturing PMI was 47.8, a two-month high, with expectations at 47.5 and the previous value at 47.3:
The output sub-index rose from 47.9 in September to 48.8, the highest reading since July 2024, but still contracting for the third consecutive month.
The supplier delivery times index decreased compared to last month, marking the lowest reading since October 2022.
The preliminary value of the United States' October Markit Services PMI was 55.3, a two-month high, with expectations at 55 and the previous value at 55.2:
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Improvements in new business have boosted the service sector. Driven by a rebound in domestic demand in the United States, the new business index climbed to its highest level since April 2022.
The price index fell from 54.6 in September to 51.1, the lowest reading since May 2020.
The preliminary value of the United States' October Markit Composite PMI was 54.3, a two-month high, with expectations at 53.8 and the previous value at 54:
The measure of expected output for the next year jumped by 8 points, reaching the highest level since May 2022. This indicates that both service providers and manufacturers are more confident.The new orders index rose from 52.5 in September to 54.2, marking the sixth consecutive month of expansion.
The composite employment index shrank for the third month in a row, slightly below the boom-or-bust threshold.
Output prices fell compared to the previous month.
Inflation-wise, there was generally good news. Although input costs remained high, the S&P Global composite selling price index fell to its lowest point in over four years this month.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said in a statement:
Business activity continued to grow at an encouragingly robust pace in October, extending the economic improvement recorded so far this year into the fourth quarter. The flash PMI for October is consistent with an annualized GDP growth rate of around 2.5%.
Demand also strengthened, with the inflow of new orders reaching the highest level in nearly a year and a half, signaling this. However, growth in output and sales was limited to the service sector.
More competitive pricing stimulated sales to some extent, which in turn drove the inflation of sales prices for goods and services to the lowest level since the outbreak of the COVID-19 pandemic in early 2020. These weaker price pressures are consistent with inflation rates below the Federal Reserve's 2% target.
Nevertheless, companies remained cautious in hiring, leading to a reduction in the number of employees for the third consecutive month.
More encouragingly, confidence in the long-term outlook for the next year has improved. This is especially true in the manufacturing sector, where factories hope that the current weakness in production and sales can be reversed as the uncertainty brought by the political environment dissipates.After the release of the Markit PMI data, there was little short-term fluctuation in major assets:
The US dollar index showed little short-term fluctuation, at 104.22.
The yield on the US 10-year Treasury note showed little short-term fluctuation, at 4.226%.
Spot gold showed little short-term fluctuation, at $2738.87 per ounce.
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