§ Flash U.S. Composite Output Index at 54.8 (53.9 in September). 3-month high.
§ Flash U.S. Services Business Activity Index at 54.7 (53.5 in September). 2-month high.
§ Flash U.S. Manufacturing PMI at 55.9 (55.6 in September). 5-month high.
§ Flash U.S. Manufacturing Output Index at 55.2 (55.8 in September). 2-month low.
Data collected October 12-23 IHS Markit Composite PMI and U.S. GDP Sources: IHS Markit, U.S. Bureau of Economic Analysis.
Private sector business activity increased at a robust and accelerated pace in October. At 54.8, up from 53.9 in September, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index signalled the fastest rate of expansion since July. The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI. Stronger overall business activity growth was driven by the service sector in October, which more than offset a slight loss of momentum in manufacturing. Higher levels of business activity were supported by another sharp rise in new work.
Survey respondents noted that improving domestic economic conditions were the main factor behind rising client demand. Robust new business growth placed additional pressure on operating capacity in October, as highlighted by another modest accumulation of unfinished work. Payroll growth remained solid as firms continued to expand capacity, though the rate of private sector job creation eased to its slowest since June 2017. October data pointed to the sharpest rise in operating expenses for five months. Survey respondents widely commented on higher cost burdens and stretched domestic supply chains in the wake of trade tariffs. Meanwhile, average prices charged by private sector firms increased at a robust pace, with the rate of inflation unchanged from September’s survey-record high. Expectations regarding the outlook for business activity improved in October, with the degree of positive sentiment the strongest for five months. Manufacturers remained more upbeat overall than service sector companies.