Markit Economics' Service Flash PMI Strong

Markit Economics' U.S. samples are reporting a sharp upturn in business this month, first with Monday's manufacturing report and now with the service flash where the headline index is up nearly 3 points to 54.8 for the strongest rate of composite growth this year. New orders are at an 11-month high as is business activity, and year-ahead expectations are at their best level since August last year. The rise in demand is being reflected in inflation readings with input costs moving up from a nearly 2-year low and with selling prices also moving higher. Not showing much life, at least yet, is employment where job creation did improve but still remains near a 3-1/2 year low. The report attributes this month's strength to rising hopes for improvement in the domestic economy. The sharp gains for Markit's samples are a surprise but are still only anecdotal indications. Definitive data on October will be posted next week with the month's unit auto sales and of course the monthly employment report.