U.S. Economic Item: PMI Report
The ISM Services Sector PMI report was released this week. This report represents roughly 70% of a developed nation’s economy.
Results showed no real changes. Given the worldwide challenges emanating from the Middle East and supply chain disruptions, this is a bullish report.
Despite companies’ efforts to build safety inventories to mitigate stockout risk and new tariffs, inventories were flat M/M. Most customers believe they are sitting just a little above balanced, and that this has been consistent M/M. This is good if you are in a supply chain role or feed products to firms. This means that as long as retail sales and consumption remain stable, they’ll need to keep reordering products, keeping the global supply chain stable and consistent.
Prices are concerning, however, as inflation persists. The prices figure is now up for the 110th consecutive month.
Q3 Starts Strong
It likely won’t hold, but the Atlanta Fed’s GDPNow estimate has started the quarter at 5.9%. Typically, there are a lot of swings in the reading throughout a quarter, but not 3-4 points worth. The fact that it is starting at nearly 6% is an interesting sign and perhaps a bit of a forecast that we might see a strong quarter of activity.
Much of it will depend on the volume of imports into the country (which generates significant activity across many sectors but detracts from overall GDP).
Read more about how this, financial developments, and other global issues could affect your supply chain.
