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November a good month for private companies

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November a good month for private companies

Markit Purchasing Manager Index for US increases significantly during month.

The Markit Flash US Purchasing Managers Index (PMI) rose significantly in November, coming in at 57.1.  The index was at 49.6 in October.

A reading above 50 indicates expansion.

"The main factor behind the higher PMI in November was an increase in new orders, the largest such increase since April 2012."  

The main factor behind the higher PMI in November was an increase in new orders, the largest such increase since April 2012.  

The PMI is a composite index comprised of separate manufacturing and services indices.  In the November, the manufacturing rose to 54.3 from its one-year low in October of 51.8.  The services index also rose in November, coming in at an unexpected 57.1 compared to 49.3 in October.

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:

“Businesses have clearly rebounded strongly from any government shutdown worries, but companies report that they are concerned that the ongoing uncertainty regarding the debt ceiling has tempered their outlook for next year.

“However, with both sectors growing at solid rates on average in recent months, GDP looks set to show annualised growth of 2.5%–3.0% in the fourth quarter. Perhaps more importantly, this is creating jobs at a reassuringly strong pace. The PMI Employment Indexes act as a reliable guide to underlying non-farm payroll trends, and November survey data point to another month of employment growth in the region of 200,000.

“The ongoing resilience of the data therefore tips the balance even further towards the Fed tapering policy at its next meeting, in early December, rather than waiting until next year.” 

 

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