| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 57.6 | 57.0 to 58.0 | 57.6 | 58.4 |
| Manufacturing Index | 55.5 | 55.0 to 55.6 | 56.0 | 57.0 |
| Services Index | 58.0 | 56.5 to 58.4 | 57.9 | 58.7 |
Highlights
The S&P Global US Composite Purchasing Managers’ Index preliminary reading came in at 57.6 in October compared to 58.4 in September, and 56.0 in August. This is still the second sharpest rise since March 2022.
Growth in activity in both manufacturing and services remained among the best seen over the past five years, with robust domestic demand (mainly precautionary stock building) complemented by signs of export growth. However, the surge in energy prices is fueling higher input costs, worsening the inflation outlook.
“[S]elling prices rose at the sharpest rate since August 2022 as companies sought to pass on a further steep rise in costs to customers,” the report said.
On the jobs front, employment rose in October at the fastest rate since June 2022. Both service sector and manufacturing payrolls increased – the latter at the fastest rate since March 2012, while the service sector jobs gain was below September but still the third largest for over four years.
The US Services PMI Business Activity Index recorded 57.9 in October, compared to 58.8 in September, and 56.5 in August, almost at expectations of 58.0 in the Econoday survey of forecasters.
The Manufacturing PMI’s preliminary reading came in at 56.0, compared to 55.9 in September and 53.9 in August and beating expectations for 55.5 in the Econoday survey of forecasters. This is the strongest improvement since May 2022.
Looking ahead, manufacturers remained more optimistic than service providers, with factory confidence has more or less back to its long-run average. In contrast, service providers’ sentiment remained well below its trend level amid worries over the cost-of-living, higher borrowing costs and political uncertainty.
Market Consensus Before Announcement
The composite expected softer but still robust at 57.6 in the October flash from 58.4 in the September final. Manufacturing seen down at 55.5 from 55.9 and services still booming at 58.0 from 58.8.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.