Markit Chief Economist on Services Flash PMI: 'Economy Growing Around 1% Again in 3rd Quarter'

By: Mike Shedlock | Wed, Sep 28, 2016
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Estimates for third quarter GDP have generally been falling fast. Both GDPNow and the FRBNY Nowcast are down nearly a full percentage points from their highs.

Today, commenting on the US Flash Services PMI, Chris Williamson, Chief Business Economist at IHS Markit said: "PMI surveys suggest that the economy is growing at an annualized rate of only around 1% again in the third quarter."

Williamson did not lower his forecast, rather he stuck with things he has been correctly stating all year. This was despite the fact the services PMI ticked up slightly this month.

Key Points

  • Sharpest rise in activity since April
  • New orders and employment increase at slower rates
  • Inflationary pressures ease

The rate of expansion in business activity at U.S. service providers picked up for the first time in three months during September, but remained relatively modest. Meanwhile, growth of new orders eased to a four-month low and companies reacted to modest inflows of new work by reducing their rate of hiring.

Although continuing to increase during September, new business was up only modestly compared to August. In fact, the rate of growth eased to a four-month low. The pace of accumulation in backlogs of work also eased and was the slowest in the current three-month sequence of rising outstanding business.

A weaker expansion of new business had a negative impact on employment growth in September. Staffing levels continued to rise, but the latest increase was only slight and the slowest since March 2013. The rate of job creation has now eased in two consecutive months.


Markit Flash U.S. Services PMI™

Markit Flash U.S. Services PMI


Comments from Chris Williamson, Markit Chief Economist


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Mike Shedlock

Author: Mike Shedlock

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Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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