October services PMI data
- Three month high for services
- Prior was 54.9
- Manufacturing 59.2 vs 60.3 expected -- seven month low
- Prior manufacturing was 60.7
- Composite 57.3 vs 54.7 expected
- Prior composite 55.0
- Record rise in backlogs of work in the composite index
- Record high in outstanding business in composite index
- Employment rose at highest since June
- Average input prices rose at a survey record pace
- Selling price inflation for goods and services also hit a new series peak
- New orders slowed with services new orders at an eight month low
These are good numbers. The whole report reads like an inflationary boom that should make the Fed worried that it's behind the curve.
From IHS Markit chief economist Chris Williamson:
October saw resurgent service sector activity as COVID-19 case numbers continued to fall, marking a encouragingly strong start to the fourth quarter for the economy. Hiring has likewise picked up as firms have been encouraged to expand capacity to meet rising demand. "However, while manufacturers also continue to report strong demand, factory production remains plagued by constraints, including record supply chain bottlenecks and labor shortages. Prices paid by factories for raw materials rose at yet another new record pace as a result, in turn feeding through to both higher prices at the factory gate and spilling over into higher service sector prices. Higher wages are also having to be offered to attract or retain staff, adding to the inflationary pressures. "Thus, while the economy looks set for stronger growth in the fourth quarter, the upward rise in inflationary pressures also shows no signs of abating."
