PMI "Broadly Consistent with GDP Growth at Just Over 2%"

Markit's Chief Economist says the Nov. PMI reading puts the economy on course for "reasonable, not stellar" GDP Growth.

Business growth eases slightly in November according to Markit's Flash Composite PMI reading of 54.6. The composite PMI is a blend of manufacturing and services. Flash means it''s a preliminary estimate.

The latest reading is signals the lowest output since July.

Key Findings

1) Flash U.S. Composite Output Index at 54.6 (55.2 in October). 4-month low.

2) Flash U.S. Services Business Activity Index at 54.7 (55.3 in October). 4-month low.

3) Flash U.S. Manufacturing PMI at 53.8 (54.6 in October). 2-month low.

4) Flash U.S. Manufacturing Output Index at 54.3 (54.6 in October). 2-month low.

Hurricane Impact

Once again, hurricanes make some of the data questionable from a medium to long-term perspective.

Markit reports cost pressures intensified at private sector companies with the second-fastest rise in manufacturing input price inflation since December 2012.

A number of firms cited higher prices for chemicals and energy following supply chain disruption linked to hurricanes Harvey and Irma.

Strong input cost pressures resulted in the sharpest rise in prices charged by manufacturers for just over three years.

Transitory Inflation

The Fed will be pleased with rising prices but I suggest any hurricane impact is transitory.

Chris Williamson, Markit Chief Economist Comments

  • “US businesses reported another month of solid growth in November, putting the economy on course for a reasonable, though by no means stellar, fourth quarter. Current PMI readings are broadly consistent with GDP growing at an annualised rate of just over 2%.”
  • “There was also good news on hiring, with a slight uptick in employment growth meaning the surveys are indicating non-farm payroll growth of just over 200,000 in November.”
  • “Both input costs and selling price inflation picked up, suggesting the upturn is feeding though to higher price pressures, though some of the manufacturing price hikes were attributable to the short-term effects of the hurricane-related supply chain disruptions.”
  • “An upturn in new order inflows means we can expect a strong end to the year, though prospects for 2018 remain more mixed. Although expectations about the year ahead slipped lower in the service sector, future optimism hit a two-year high in manufacturing, suggesting the goods-producing sector may start to make a stronger contribution to the economy in coming months.”

Optimism is related to a pickup in orders following the hurricanes. It's a meaningless, if not contrary, indicator.

Mike "Mish" Shedlock

No. 1-6

Hello nic9075 I hope you and your family also had a great thanksgiving. Unlike yesterday’s Black Friday, not so many years ago the day after Thanksgiving brought thankful Christmas shoppers out in a safe environment to purchase gifts in the true Christmas spirit of generosity and peace. Back to your point, this Christmas/ holliday season has always been the biggest yearly boost to the economy. However, will this trend continue in the next few years with the introduction of the millennials “fitting in” to the workforce. In this vein I am attaching a link to a video I received from a friend over Thanksgiving. It is amusing but also too realistic. After viewing this I would like to hear Mish’s and your comments.


Also don't 60% of people have less than one thousand i in available cash if an actual emergency were to occur. See that's the thing millennials have been coddled and mommy and daddy take care of everything and pay the rent, car payment and all their bills usually so they don't know what an actual emergency is


Sure taking on debt for depreciating assets. Smartphones and computers become obsolete within months. People upgrade at full price between 3-6 months but remember 0% credit cards become 15% within 12 months. Sure u have free money from the credit card Co but debt is debt and must be paid


@truthseeker did you do your black Friday shopping yet. The average person has spent probably between $2000 - $10,000 just on this black Friday weekend. So far shopper trak has sales up over 24% from last year with avg amount spent just on black Friday alone as $4703


Hope you and your wife had a great thanksgiving Mish. My wife and I are exhausted since this year , all 6 grandkids showed up with their DOG bringing lots of fun and lots of stress! Anyway with growth being somewhat higher than what some of us had expected, consumers feeling optimistic taking on more debt, spending savings helped growth somewhat as you mentioned. Also I noticed, as you know, in December of last year the dollar index hit its high of around 104. Then shortly thereafter it began to fall all the way down to around 91, while at the same time, the Trump administration began to really hammer away at dozens or even hundreds of onerous regulations put in place by the Obama anti business administration. Now the dollar has bounced some as I look at a chart of the two year note making a new high around 174. The Fed wants to raise rates yet as they do so, this will keep pushing the dollar up hurting growth something I don’t think Trump will ignore.