Preview: Due November 21 - U.S. November PMIs - Modest corrections lower, still healthy
We expect November’s S and P PMIs to both see modest slippage, manufacturing to 52.0 from 52.5 and services to 54.5 from 54.8 but these will be more corrections from September improvements than any suggestion of underlying weakness. The levels will remain healthy.
The manufacturing index would be reversing a September improvement which was consistent with the message of the majority of regional manufacturing surveys but contrasted by a dip in the ISM manufacturing index. The S and P manufacturing index has been consistently outperforming the ISM’s in the year to date but may struggle to extend September’s gain.
The S and P services PMI has also been outperforming its ISM counterpart, though the ISM services index did see some catch up in September, though not by enough to suggest October’s S and P services index can extend on a September rise. Regional services sector surveys were mostly subdued. Fed easing may be providing some support but there is downside risk coming from recent consumer strength, running ahead of real disposable income, looking unsustainable.
