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

October's preliminary US PMI data indicates strong economic growth, marking the second-fastest expansion this year. New business activity saw its biggest increase in 2025, driven by gains in both the services and manufacturing sectors. The economic expansion aligns with a 2.5% annualized rate, mirroring the third quarter's growth. Despite the positive activity, business confidence for the coming year has declined significantly, reaching a three-year low. Concerns include the impact of government policies, particularly tariffs, and disappointing export sales. Manufacturers face challenges selling finished products due to excess inventory from earlier input purchases. Input costs continue to rise due to tariffs, but consumer price inflation has slowed as businesses compete. There has been no pass-through of tariff-induced inflation to consumers. These positive figures emerge amidst a lack of official economic data due to the government shutdown. Overall, the data points to robust growth despite some underlying anxieties in the business outlook.