Growth in U.S. manufacturing and services sectors rebound sharply in October

Economic growth throughout U.S. manufacturing and services have sharply improved, pointed by the October U.S. Sector PMI data. This was in line with the U.S. Composite PMI Output Index rising to an 11-month high of 54.9. Leading the way is consumer goods, followed by technology. The only sector that decelerated was the financials; however the rate of growth was still strong overall. Consumer goods, which was the best performer in the third quarter on average, returned to the summit of the sector rankings in October, noted Markit.

Output rose at the sharpest rate in 20 months, assisted by a considerable increase in new work. However, employment barely grew, implying that uncertainty regarding the near-term outlook remains. According to Markit, last month’s growth leader, financials, was unique in recording a slowdown in October. However, activity continue to rise strongly overall and the pace of job creation rose on the back of the sector’s recent solid performance.

After a near-stagnation in output in technology in September, it was seen as the second-fastest growing sector in October. Data underlined a rebound in new business as the main driver of activity growth.

Basic materials, industrials, consumer services and healthcare all recorded strong growth in output. Consumer services witnessed the softest growth, but it still showed a rebound from modest growth in the preceding three months, added Markit.

The rise in industrials output was the most marked in 12 months. Healthcare hinted at a similar improvement, with growth rising to a one-year high. Meanwhile, basic materials production growth was indicative of a rebound throughout the manufacturing economy as a whole. Exports grew markedly for the first time since January, noted Markit.