by Mish

Real GDP

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If the economy was indeed growing for 95 consecutive months (Nearly 8 Years), the above chart would not look like it does.

For the first quarter, ISM estimated 4.3% GDP growth.

Today the ISM says “The past relationship between the NMI® and the overall economy indicates that the NMI® for June (57.4 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis.

Markit Services PMI


IHS Markit U.S. Services PMI™ – final data (with composite PMI™)
Key Findings
Strongest expansion in business activity since January
New order growth also at five-month high
Input prices rise at fastest pace in two yearsThe final seasonally adjusted IHS Markit U.S. Composite PMI™ Output Index rose to 53.9 in June, up from 53.6 in the previous month.
Although the composite figure picked up in June, the rate of growth remained historically muted. Nonetheless, the average pace of expansion indicated over the first half of the year was faster than that seen during the same period last year.
The rate of growth in the services sector was stronger than the manufacturing sector for the first time since June 2016, according to latest survey data.

Chris Williamson Markit Chief Economist Comments

  • “The final PMI numbers came in higher than the initial flash reading and provide news of a welcome uptick in the pace of growth in the vast services economy at the end of the second quarter.”
  • “The services data follow news from the sister manufacturing survey showing steady but unspectacular growth in US factories.”
  • “Looking at the combined performance of manufacturing and services, output, order books and employment all gained momentum in June, and average prices charged for goods and services rose at the fastest rate for nearly three years.”
  • “However, the average all-sector PMI reading for the second quarter is down slightly on the first quarter, suggesting that the underlying pace of economic growth remains somewhat subdued though still robust. The surveys are historically consistent with annualized GDP growth of just over 2%. Actual GDP data are expected to show a stronger rebound, though largely reflecting volatile quarterly seasonal variations in the official data.”

Markit vs. ISM GDP Estimates

  • First Quarter Markit: 1.7%
  • First Quarter ISM: 4.3%
  • First Quarter Advance Report: 0.7%
  • First Quarter Final Report: 1.4%
  • Second Quarter Markit: “Just over 2.0%”
  • Second Quarter ISM: 3.3%

This is not a one-quarter phenomenon. ISM has been consistently way too high for some time.

Related Article: ISM vs Markit PMI Divergence Widens Again: Believe Markit.

Mike “Mish” Shedlock

ISM-PMI Divergence Widens: Markit Estimates 2nd Quarter GDP at 1.1%, Says Profit Squeeze Underway

Unlike their counterparts at the ISM, Markit sees growth in both services and manufacturing weakening with U.S. private sector growth at a seven-month low in April.

ISM-Markit Manufacturing Divergence Widens Again

The divergence between the ISM Report on Business and the Markit PMI manufacturing index widened this month. ISM increased slightly from 54.8 to 54.9 while the Markit reading declined slightly to an 8-month low of 52.7 from 52.8

Markit PMI vs. ISM Fantasyland GDP Projection: Stagflation Lite?

The discrepancy between the ISM’s Report on Business and Markit’s Manufacturing PMI assessment of the economy widened today.

1st Quarter GDP Estimates: ZeroHedge, Mish, GDPNow, Nowcast, ISM, Markit

On Friday, April 28, the BEA will release its preliminary estimate for first quarter GDP.

Markit vs. ISM Services: Markit Economist Sticks with 1% Third Quarter GDP Estimate

On many days there are no economic reports. On some days, like today, there are many reports.

Another ISM/PMI Divergence: Non-Manufacturing

On April 3, I noted a huge discrepancy between the ISM manufacturing report and Markit’s PMI manufacturing report.

ISM and Markit Manufacturing Reports Skewed by Energy Sector and Airplane Orders?

The divergence between Markit’s US Manufacturing PMI and the ISM’s “Report on Business” narrowed a bit today with both numbers retreating a bit but ISM cooling more.

Six GDP Estimates: ZeroHedge, Mish, GDPNow, Nowcast, ISM, Markit

On Wednesday, I asked a handful of bloggers and economic writers their estimate for first quarter GDP.

Tale of Two Indexes: Non-Manufacturing ISM vs Markit PMI

The ISM Non-Manufacturing Index strengthened in October. Markit's Service PMI weakened.