Composite PMI September Report Results Nearly Flat

Nearly flat are the results of both September's manufacturing PMI, at 51.0, and services PMI, 50.9. The composite for the month is 51.0 and little changed from August's 51.2 in a two-month stretch that is the weakest for these data in more than three years.

And the outlook for October's activity isn't favorable based on new business growth which, despite an uptick for the manufacturing sample that was, however, offset by services, is at record lows for this report where data go back about 10 years.

Companies can keep up activity like production, at least for a time, by working down backlog orders which they are doing in these samples. Low backlogs are a negative for employment which the report notes saw cutbacks. In fact, indications from the samples, for the first time in nearly 10 years, point to contraction in September private payrolls. A small plus is a slight pick up in business expectations which, nevertheless, remain near seven year lows. Confirmation of weakness comes from prices which contracted for inputs, especially in the service sector, and were unchanged for selling prices.

The report notes that export orders for the manufacturing sample continue to weaken, a reminder that slowing global demand has been holding down the US factory sector and appears to be spilling into services and holding this sector down as well.