US PMI surveys signal strong end to third quarter
Markit's US PMI surveys signalled an easing in the pace of economic growth in September, but there's good reason to believe that growth will be sustained at a robust pace in coming months and could even pick up again.
The seasonally adjusted final Markit US Composite PMI" Output Index (covering manufacturing and services) posted 59.0 in September (flash: 58.8), down from 59.7 in August and the lowest reading for four months. Nonetheless, the latest index still pointed to a strong pace of output expansion, supported by rises in both manufacturing production (index at 59.6) and services (58.9).
The surveys collectively point to the economy growing at an annualised rate of at least 3% in the third quarter.
The order book situation also provides a very encouraging forward-looking picture, boding well for further strong economic growth in the fourth quarter. Inflows of new orders across both sectors rose at one of the fastest rates seen since the financial crisis, coming in just shy of June's peak. Growth of backlogs of work hit a survey high as a result, suggesting companies will be expanding to meet this surge in demand.
The surveys therefore highlight how the bristling US economy continues to decouple from the rest of the world, though adds to the likelihood of the US being the first of the major developed economies to raise interest rates.
View the full PMI press release here.
Chris Williamson | Chief Business Economist, IHS Markit
Tel: +44 20 7260 2329
chris.williamson@ihsmarkit.com