US September PMI surges to 58.4, highest in over five years, fueling inflation concerns
The S&P Global US Composite PMI Output Index rose to 58.4 in September, the highest since July 2021, driven by a surge in new orders to 58.2. The data indicates an annualized GDP growth rate of approximately 5.1%, according to the Atlanta Fed. However, input costs jumped to 66.4, the highest since October 2022, and supply chain delays intensified. S&P Global Chief Business Economist Chris Williamson warned that rising backlogs give companies more pricing power, posing a risk to the inflation outlook.
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US September PMI Surges to 58.4, Highest in Over Five Years, Fueling Inflation Concerns
According to S&P Global data released on Wednesday, the US Composite PMI Output Index for September surged to 58.4, the highest level since July 2021 and significantly above August's 56.0. The reading, driven by a sharp increase in new orders (index at 58.2, highest since March 2022), indicates robust expansion in both the services and manufacturing sectors. The data aligns with an annualized GDP growth rate of around 5.1%, as tracked by the Atlanta Fed. However, the strong demand is leading to a buildup of backlogs (highest since May 2022) and significant supply chain bottlenecks, which S&P Global Chief Business Economist Chris Williamson warned gives companies more pricing power and poses a risk to the inflation outlook. Input costs surged to 66.4, the highest since October 2022, with services seeing the steepest rise. The report notes that supply delays are the most widespread since July 2022, exacerbated by the ongoing conflict in the Middle East and persistent labor shortages. The data comes after the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4.00%, signaling further potential rate hikes to combat inflation.
Read sourceUS September PMI Surges to 58.4, Highest in Over Five Years, Fueling Inflation Concerns
The S&P Global US Composite PMI Output Index surged to 58.4 in September, its highest level since July 2021 and well above the 56.0 recorded in August, signaling robust expansion in both the services and manufacturing sectors. The new orders index jumped to 58.2, the highest since March 2022, driving a significant increase in backlogs of work, which rose to their highest since May 2022. S&P Global Chief Business Economist Chris Williamson noted that while the order backlog suggests further expansion, it also gives companies more pricing power, posing a risk to the inflation outlook. Input costs surged, with the index climbing to 66.4, the highest since October 2022, driven by rising raw material prices and supply chain bottlenecks. The data pushed the 10-year Treasury yield back above 5% and the dollar index above 101. The Federal Reserve recently raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00% and signaled further rate hikes may be needed to curb inflation.
Read sourceUS September PMI Surges to 5-Year High, Fueling Inflation and Fed Rate Hike Concerns
According to S&P Global data released Wednesday, the US Composite PMI Output Index for September rose to 58.4, the highest since July 2021, up from 56.0 in August. The surge was driven by a sharp increase in new orders, which hit their highest level since March 2022. Both the services and manufacturing sectors showed strong expansion, with the overall data aligning with an annualized GDP growth rate of around 5%. However, the report also highlighted rising inflationary pressures. Input costs jumped to their highest since October 2022, and supply chain bottlenecks worsened, with delivery delays reaching their most widespread since July 2022. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that while the backlog of orders signals future expansion, it also gives firms more pricing power, posing a risk to the inflation outlook. The data pushed the 10-year Treasury yield above 5% and the dollar index above 101. The Federal Reserve recently raised its benchmark overnight interest rate by 25 basis points to a target range of 3.75%-4.00% and signaled further rate hikes may be coming.
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US September PMI Surges to 58.4, Highest in Over Five Years, Fueling Inflation Concerns
According to S&P Global data released Wednesday, the US Composite PMI Output Index for September rose to 58.4, up from 56.0 in August and reaching its highest level since July 2021. The surge was driven by a sharp increase in new orders, which climbed to 58.2, the highest since March 2022, with growth seen across both services and manufacturing. The data aligns with an annualized GDP growth rate of approximately 5.1%, according to the Atlanta Fed. However, the strong demand has led to a buildup in backlogs, which S&P Global's Chris Williamson warned gives companies more pricing power and poses a risk to the inflation outlook. Input costs rose sharply to 66.4, the highest since October 2022, driven by supply chain bottlenecks and rising raw material prices. The report noted that supply delays are at their most widespread since July 2022, excluding the pandemic period. In response to persistent inflation, the Federal Reserve raised its benchmark overnight interest rate by 25 basis points to a target range of 3.75%-4.00% and signaled further rate hikes may follow.
Read sourceUS September PMI Hits 5-Year High as Strong Demand Intensifies Inflation Pressures
According to S&P Global's preliminary data released Wednesday, the US September Composite PMI Output Index rose to 58.4 from 56.0 in August, the highest level in 62 months and the fastest expansion in over five years. The Services PMI Business Activity Index climbed to 58.7 (59-month high), while the Manufacturing Output Index surged to 56.7 (53-month high). S&P Global Market Intelligence Chief Business Economist Chris Williamson stated that US business activity continues to boom, with output growth at its fastest in over five years. The data suggests the economy is growing at an annualized rate of approximately 5%, with the Atlanta Fed's GDPNow model estimating about 5.1% growth, compared to 1.5% in Q2. The New Orders Index jumped to 58.2, the highest since March 2022, indicating robust domestic demand. However, backlogs of work rose to the highest since May 2022, and supply chain delays intensified, with the proportion of firms reporting delays at the highest since July 2022. The Input Price Index surged to 66.4, the highest since October 2022, driven by rising raw material costs and record diesel prices. Williamson noted that rising backlogs signal stronger pricing power for firms, raising concerns about the inflation outlook. This poses a new challenge for the Federal Reserve, which recently raised interest rates by 25 basis points to 3.75%-4.00% and signaled further tightening, as strong demand itself may now be fueling inflation beyond supply-side shocks.
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