Friday's November US Services Purchasing Managers' Index conducted by Markit came in at 54.7 percent, down 0.1 percent from the final October estimate. The Investing.com consensus was also for 54.8 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Here is the opening from the latest press release:
U.S. service sector companies reported another robust increase in business activity during November, with the pace of expansion holding close to the 11-month peak seen in October. As a result, growth momentum remained much stronger than seen in the first half of 2016. [Press Release]
Here is a snapshot of the series since mid-2012.
Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management, which they refer to as "Non-Manufacturing". Over the past year the ISM metric has been significantly the more volatile of the two.
The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend. Since early in 2016 the ISM metric has shown stronger growth than the Markit counterpart. It will be interesting to see how these two indicators play out in the coming months.
Both series have weakened since 2015. The interim three-month moving average of the Markit Services index peaked in August of 2014. The ISM index peaked in September of 2015. The two were fairly closely aligned at the beginning of this year, but they diverged in early 2016 with the Markit index signaling noticeably weaker growth. We'll see if the recent uptick in the Markit index continues.
by Jill Mislinksi