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US Markit Composite PMI Rises, But Outlook Remains Gloomy

Dow Jones

The US Markit Composite PMI for September reached 51 in September from 50.9 in August. The manufacturing PMI helped the composite index as it rose to 51 from 49.9, while the service sector PMI remained unchanged at 50.9, vs. expectations of a rise to 51.3.

The EURUSD and USDJPY had barely reacted on the news. Stock market indices like the S&P 500 and Nasdaq 100 were higher five minutes after the report as the better than expected Markit Composite PMI suggest that the US economy is doing slightly better than expected.

The Chief Business Economist at IHS Markit said the indicator is now suggesting that the US economy is growing by 1.5% annualized. He also said that the outlook is gloomy with inflows to news business being at the lowest levels since 2009. The indicator is also suggesting that jobs are being cut for the first time since January 2010 and that the September Non-Farm Payrolls might print below 100,000.

The latest NFP figure for August showed that the US economy created 130,000 new jobs, lower from 159,000 in July. While the US unemployment rate remained unchanged at 3.7% for three months in a row.Source: IHS Markit