U.S. financial activity grows sharply in September

U.S. Sector PMI data indicated that the nation’s financial activity grew sharply in September. This was the first month since the turn of 2016 in which financials had been ranked top out of seven monitored sectors. Consumer goods, which were the best performer in July and August, came in second, whereas the healthcare sector came in third. Technology did not perform well as activity stagnated, noted Markit.

Financials have witnessed the most rapid rise in activity since late 2015 in September. Marked new business growth and strong creation of job mainly underpinned the higher output. In case of new orders, the index rose to an 18-month high. Financial activity has been closely linked with the US Composite PMI throughout most of its history. Thus the latest upturn might augur well for overall economic growth.

While taking a look at the third quarter on average, consumer goods was the most rapidly growing sector. Output has increased strongly in the last three months. On the contrary, technology witnessed the most subdued quarterly trend. Modest growth in July and August were followed by stagnation in the latest period. Employment and new business both dropped in September.

In the meantime, healthcare rebounded after coming in the bottom in August. Output had dropped at a survey-record rate in the previous month; however, it rebounded with strong growth in September. Consumer services, basic materials and industrials all registered modest rises in output during September. The rise in basic materials production now extends to four months, and was strengthened by the most rapid hiring in more than a year in September.

Markedly, consumer services companies lowered their charges at a rate unchanged from 76-month record in August. Consequently, new work increased strongly for the second straight month, implying that discounting had assisted in boosting demand.