PMIs Show US Business Activity Accelerated In October At Second-Fastest Pace This Year

US business activity growth accelerated in October to the second-fastest so far this year, according to early ‘flash’ PMI data, accompanied by the largest rise in new business seen in 2025 to date.

Both Services and Manufacturing surveys increased more than expected in the preliminary October data (with Services continuing to lead)…

“October’s flash PMI data point to sustained strong economic growth at the start of the fourth quarter,” according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, “with business activity picking up momentum across both manufacturing and services despite some reports of businesses being adversely impacted by the government shutdown.”

The survey data are consistent with the economy expanding at a 2.5% annualized rate in October after a similar rise was signalled for the third quarter.

But it wasn’t all unicorns and fairytales:

“However, business confidence in the outlook for the coming year has deteriorated further, and is at one of the lowest levels seen over the past three years as companies worry about the impact of policies, most notably tariffs.

Companies are also concerned over disappointing export sales, especially in manufacturing, and factories are seeing an unprecedented rise in unsold stock.

Having bought excess inputs earlier in the year to front-run tariffs, producers are making more goods to use up these inputs but are often struggling to sell the end product to customers.“

Finally, Williamson notes that there has been no pass-through of tariff-induced inflation to consumers

“Hence, although input costs continued to rise sharply again in October, principally reflecting the pass-through of tariffs, average selling price inflation has cooled to the lowest since April as firms compete on price to win sales.”

Solid ‘soft’ data amid a vacuum of ‘hard’ data dude to the govt shutdown.