- Previous month manufacturing PMI 47.9. Services PMI 50.5
- Manufacturing PMI 48.9 vs. 48.0 estimate
- Services PMI 50.2 versus estimate 50.6
- Composite PMI 50.1 versus 50.2 last month
Mixed report compared to expectations. The manufacturing sector remains below the 50 level, an indicator of contraction. Services remains just above the 50.0 level as it clings to growth.
The recent peak for the services PMI stood at 54.9 in May.
General comments from S&P Global
- American companies experienced widespread stagnation in their production at the end of the third quarter.
- Manufacturers and service providers reported moderate demand.
- September data showed the worst private sector performance since February.
- The dynamics of the services economy continued to run out of steam.
- New orders saw their biggest decline of the year, with demand for services down noticeably.
- Manufacturers reported a decline in new sales, although less severe.
- Input costs have increased, leading to increased cost pressure.
- The rate of cost inflation was more moderate than the three-year average.
- Despite rising costs, companies struggled to raise sales prices due to low customer interest, maintaining the same pace as in August.
Comments from Sian Jones, economist at S&P:
September PMI data reinforced concerns about the trajectory of demand in the US economy following interest rate hikes and high inflation. Although the overall production index remained above the 50.0 mark, it was only to a limited extent, with broad stagnation in total activity reported for the second consecutive month. The services sector lost further momentum, with the contraction in new orders accelerating. “Weak demand did not translate into overall job losses, as a greater ability to find and retain employees led to a faster increase in job growth. That said, increased hiring due to increasing candidate availability may not be sustainable due to increasing spare capacity and decreasing backlogs that previously supported workloads.
“Inflationary pressures remained marked as costs increased again at a faster rate. Rising fuel costs following the recent rise in oil prices, as well as increased payroll, have driven up operating expenses. Weak demand nevertheless posed a barrier to companies’ ability to pass on higher costs to their customers, with prices charged remaining unchanged this month.