Following this morning’s recovery-narrative-destroying European PMIs, analysts remain upbeat about the US business sentiment surveys (with both Manufacturing and Services expected to continue expanding in preliminary August data). But USA, USA, USA did not disappoint, absolutely crushing expectations…
U.S. private sector firms signaled a strong upturn in business activity in August, with both manufacturers and service providers registering expansions. Notably, it marked the first rise in service sector activity since the start of the year, while goods manufacturers recorded the fastest increase in production since January 2019.
The US Composite PMI (54.7) is now the strongest of the reported nations in flash August data, its highest since March 2019…
“August data pointed to a further improvement in business conditions across the private sector as client demand picked up among both manufacturers and service providers. Notably, the renewed increase in sales among service sector firms was welcome news following five months of declines.
“Encouragingly, firms signalled an accelerated rise in hiring, as greater new business inflows led to increased pressure on capacity. Some also mentioned that time taken to establish safe businesses practices had now allowed them to expand their workforce numbers.
“However, expectations regarding output over the coming year dipped slightly from July due to uncertainty stemming from the pandemic and the upcoming election.
“Meanwhile, cost burdens surged higher amid reports of greater raw material prices. Although manufacturers increased their selling prices at a faster rate to help compensate, service sector firms noted that competitive pressures and discounting to attract customers had stymied their overall pricing power.”
Is this good news or bad news? The US economy is back baby… so no ned for Fed pumping and Govt priming?