PMI Composite Report Tops High Forecasts

Advance indications are picking up increasing signals of growth including the PMI composite which, at 55.7 in the October flash, easily tops Econoday's high forecast. Manufacturing is contributing strongly to the rise, at 54.5 which is an 8-month high and up strongly from September. Services are also contributing, at 55.9 for also a sizable gain.

Strength in the manufacturing sample is centered in new orders and employment. Of special note are unusual delivery delays, which help lift the composite indexes and are the result of lingering disruptions and stretched workloads following Hurricanes Harvey and Irma. Orders and employment are moderating for the service sample but not the 6-month outlook which is improving. Price data show moderating but still strong pressures for inputs but slowing traction for selling prices.

Markit Economic's samples have been reporting significantly less strength than other private and regional reports including the ISM where both the manufacturing and non-manufacturing composites are near or over the 60 mark. The uptick for Markit's data offers confirmation perhaps of strength in other reports and does point to a solid close for the 2017 economy. Note that private and regional reports are based on small sample sizes and offer no more than a directional signal for economic change.

Recent History Of This Indicator:
Markit Economics' set of U..S. indicators was mixed in September but continued to indicate solid overall growth. The composite index slowed 5 tenths to 54.8, a level that is comfortably above breakeven 50. The services PMI has been the leading strength though this index did slow to 55.3 in September with Econoday's October call at 55.2. The manufacturing PMI, in sharp contrast to other private data on the factory sector, has been the soft, coming in at 53.1 in September with forecasters looking for 53.3 in October's flash. The composite index is expected to hold unchanged at 54.8.