After the schizophrenic manufacturing data (ISM 13yr highs, PMI unch YoY), Services data was just as fucking ridiculous!
UK and EU Services PMIs rose (and beat expectations) but US’ September PMI dropped from 56.0 to 55.3.
Markit’s Services PMI dropped to 55.3 (dragging the composite index lower) as inflationary pressures intensify (highest in 3 years), and future optimism is at its lowest since February.
ISM Services, however, saw the same idiocy as with manufacturing, exploded higher to 59.8 – the highest since Aug 2005 (3rd highest data print ever for ISM Services)
That is a 5 standard deviation beat of expectations…
Just as with PMI data, ISM also showed a huge inflationary spike in Prices
Please bear in mind that we have seen this kind of outlier before… during Katrina…
Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
“Given the disruption caused by recent hurricanes, some pull-back in business activity was understandable, so the resilient reading of the September services PMI makes for encouraging reading.
“While rebuilding and a return to normal business conditions after the hurricanes will hopefully boost growth in the fourth quarter, it’s worrying to see business expectations about activity levels over the coming year drop in September. Measured across both manufacturing and services, future optimism is at its lowest since February, suggesting companies have become increasingly cautious about the outlook.
“However, while optimism has slipped, the ‘hard’ survey data on recent output, new orders and hiring trends remain solid. Combined with the further upturn in price pressures seen in September, the survey data will further fuel expectations that the Fed will be keen to hike interest rates again before the year is out.
Average prices charged for goods and services rose at the fastest rate for three years in September, though it’s not yet clear how much of the rise reflected short-term hurricane effects.”
