Election A Factor In U.S. Oct PMI Reading

Highlights from the IHS Markit release which showed a pickup in both Manufacturing and Services PMIs in the October Flash reading vs September:

• New business growth slowed, with election a factor: "Although the upturn in activity quickened, the pace of new business growth eased slightly in October. Slower expansions in new orders were seen among manufacturers and service providers, with some firms stating that the ongoing impact of the ... pandemic had weighed on demand. Other companies noted that a number of clients were holding back on placing orders until after the upcoming presidential election. Nonetheless, the rise in new business remained solid overall and was the second-fastest since March 2019"
• Weak new export orders: "the increase in foreign client demand slowed notably, as manufacturers registered a renewed contraction in new export orders"
• Lower backlogs, weaker hiring: "firms recorded a slower accumulation in backlogs of work. As a result...companies expanded their workforce numbers at a slower rate than that seen in September"
• Subdued output price pressures: "input costs rose strongly in October [but] the rate of output charge inflation eased, as firms sought to boost sales by price discounting and struggled to pass on higher costs to clients"
• More optimism on outlook: "greatest degree of confidence since May 2018....stemmed from expectations of sustained client demand, political uncertainty easing after the election and hopes of an end to COVID-19 related restrictions at some point over the coming year"