S&P Global Composite PMI Flash
What is S&P Global Composite PMI?
The ISM (Institute for Supply Management) PMI is a monthly survey of purchasing managers at US manufacturing and services companies. Readings above 50 indicate expansion; below 50 signals contraction. The Manufacturing PMI is released on the first business day of the month; the Services PMI on the third business day. Both are released at 10:00 AM ET.
Why does it matter for investors?
PMI is a leading economic indicator — purchasing managers place orders ahead of production, so their sentiment predicts future activity. The Manufacturing PMI has been in contraction territory for much of 2022–2024 as goods demand normalized. Services PMI (covering ~70%+ of the economy) is more important for broad economic health. The sub-indexes — New Orders, Employment, Prices Paid — each carry significant signal.
What to watch for
- ›50 threshold: above = expansion, below = contraction
- ›New Orders sub-index (leading indicator of future activity)
- ›Prices Paid sub-index (inflation signal for the Fed)
- ›Employment sub-index (relevant for Friday's jobs report)
- ›Manufacturing vs. Services PMI divergence (goods vs. services economy)
What does a PMI below 50 mean?
A PMI reading below 50 indicates that more purchasing managers reported business conditions are contracting than expanding. Sustained PMI below 50 historically precedes slower GDP growth and potential recession.
What is the difference between ISM Manufacturing and ISM Services PMI?
ISM Manufacturing covers goods-producing industries (roughly 10% of US employment but highly cyclical). ISM Services covers the rest of the economy including finance, healthcare, tech, and retail — more closely tied to GDP and consumer activity.
Market Reaction
QQQ & SPY price change ±5 trading days around this event
Source: Yahoo Finance