Preliminary S&P Global data for September reveals a significant acceleration in U.S. business activity, with both services and manufacturing sectors exceeding analysts' forecasts. The composite Purchasing Managers' Index (PMI), which combines both sectors, reached 58.4, a notable increase from August's 56.0. This robust expansion suggests a resilient economy, potentially reinforcing the Federal Reserve's current monetary policy stance.
The services sector led this surge, with its PMI climbing to 58.7 from 56.8 in August, well above the anticipated 56.0. Manufacturing also showed substantial improvement, rising to 57.0 compared to the previous 53.2 and expectations of 53.6. These figures represent multi-year highs for overall output growth, signaling strong domestic demand.
For retail forex and CFD traders, robust economic data like strong PMIs can influence currency valuations, particularly the US Dollar, as they reflect the health of the economy and potential future interest rate decisions by the Fed. Stronger economic performance often supports a hawkish central bank outlook.
Employment and Inflationary Pressures Rise
The latest survey highlighted a significant uptick in employment growth, reaching its strongest pace since June 2022 across both sectors. Manufacturing hiring, in particular, saw its fastest increase since February 2021. Despite this surge in labor, backlogs of work expanded at their quickest rate since May 2022, and supplier delivery times lengthened, indicating potential capacity constraints within the economy.
Input cost inflation also accelerated, reaching its highest level since October 2022. While new orders in both services and manufacturing grew at their fastest rates since spring 2022, primarily driven by domestic demand, goods exports continued to decline, and services exports saw only modest gains. This suggests that the current economic momentum is largely domestically driven.
Overall, the September flash PMI data paints a picture of a rapidly expanding U.S. economy, characterized by strong demand, increased hiring, and rising input costs, factors that the Federal Reserve will likely consider in its ongoing assessment of inflation and economic growth.
📰 Based on reporting from: ForexLive →