Data from S&P Global showed the gap in growth between the manufacturing and services sectors continued in September.
- flash manufacturing Purchasing Managers’ Index for September: 47.0 (Expected 48.6, down from 48.0 to 47.9)
- flash Services Purchasing Managers’ Index for September: 55.4 (55.3 forecast, 55.7 previously)
producer of goods Manufacturing sector The index shrank further from 48.6 to 47.0, marking its third consecutive decline. Sharpest deterioration since June 2023.
New orders — which fell at the fastest rate since December 2022 — were the biggest negative contributor, followed by employment rates, which fell at a pace not seen since the pandemic-era June 2020.
Meanwhile, Service sector It has been extended for another month but I slowed down a bit. From 55.7 to 55.4.
The report indicated that Economic Uncertainty and Demand Around the US Presidential Electionleading to a deterioration in confidence and a slowdown in employment in the services sector.
Link to S&P Global US Flash Composite PMI for September
The composite PMI report indicated that average prices for goods and services rose at the fastest rate since March, with selling price inflation hitting a six-month high for both industries as input costs rose.
Chris Williamson, chief trade economist at S&P Global Market Intelligence, also noted:
“Although the PMI points to a further deterioration in the employment trend in September, The FOMC may need to move cautiously in implementing further rate cuts..
Prices of goods and services are rising at the fastest rate in six months, with input costs in the services sector – the main component of which is wages and salaries – rising at the fastest rate in a year.
Market Reactions
US Dollar vs Major Currencies: 5 minutes
US Dollar Overlay Against Major Currencies Chart by TradingView
The US dollar, which had been trending lower since the London session, briefly rose against safe-haven currencies such as the Japanese yen and the Swiss franc, as well as popular currency pairs such as the euro, the Australian dollar and the New Zealand dollar after the data was released. One possible factor? Continued growth in the services sector.
But it didn’t take long for markets to factor in the weak employment outlook, persistently rising prices and uncertainty surrounding the upcoming presidential election. The US dollar extended its losses, hitting a low of the day at the London close before stabilising or recovering slightly against its main rivals.
By the end of the day, the dollar was in the red across the board, with the euro’s weakness being the only exception.