The September Markit services and composite PMIs
- Prior was 50.7
- Prelim was 50.9
- Composite reading 51.0 vs 51.0 prelim
- Prior composite 50.7
- Worst reading on new business since the survey began in Oct 2009
- Firms reduced workforce for the first time since early 2010
There were no fireworks in this release and that could help to calm nerves ahead of the ISM data at the top of the hour. Note that the Market manufacturing data did not predict the ISM manufacturing weakness on Tuesday, so I don't know how much comfort anyone will take.
Zooming out, there is clearly some weakness that has crept in compared to 2018 and early in the year. The details of the report were also poor, with dismal numbers on new business and employment.
Chris Williamson, Chief Business Economist at IHS Markit said: "A disappointing service sector PMI follows news of lacklustre manufacturing and means the past two months have seen one of the weakest back-to-back expansions of business activity since 2009, sending a signal of slower GDP growth in the third quarter. The surveys are consistent with the economy growing at a 1.5% annualised rate in the third quarter, with forward-looking indicators suggesting further momentum could be lost in the fourth quarter. In particular, inflows of new business have almost stalled, with September seeing the smallest increase since 2009, and business expectations about the year ahead remain stuck at one of the gloomiest levels since at least 2012."
