Composite PMI Shows Resilience Amidst Mixed Economic Signals

Composite PMI Shows Surprising Results

On August 22, 2024, S&P Global released its flash PMI reports for August. The Manufacturing PMI saw a significant dip, declining from 49.6 in July to 48.0 in August, contrasting sharply with analyst consensus set at 49.6. This decline signals increased rates of contraction in new orders and inventories, marking the first decrease in factory production in seven months.

Resilience in the Services Sector

In contrast, the Services PMI recorded a slight increase, moving from 55.0 in July to 55.2 in August, outperforming analysts' expectations of 54.0. Overall, the Composite PMI fell from 54.3 to 54.1, yet it was still better than the predicted drop to 53.5.

Overall Economic Implications

S&P Global noted, “Growth disparities widened further, however, with the service sector expanding at a solid and increased rate while manufacturing output declined at the fastest rate for 14 months.” The U.S. Dollar Index reacted positively, testing session highs following the PMI report releases, indicating a persistent confidence in the economy.

• Gold prices pulled back below the $2485 mark amid rising Treasury yields.
• SP500 stabilized near 5635 as traders maintained a bullish outlook.
• Market sentiment appears to bet on aggressive rate cuts by the Fed, o<>ffering potential support to major indices.

For a look at all of today’s economic events, check out our economic calendar.