PMI reports show V-shaped recovery in services and manufacturing

Early readings of IHS Markit's manufacturing and services purchasing managers' indexes rose by more than expected in August, showing continued improvement in expectations and output among U.S. firms.

By the numbers: The manufacturing index rose by 2.7 points month over month to 53.6, continuing the series' rise from 50.9 in July.

• The services index rose by the most since March 2019, beating expectations and jumping to 54.8 (50 is the dividing line between growth and contraction).

What it means: Companies in both the manufacturing and services sectors saw a resurgence in new orders, the reports showed.

• "The rate of job creation accelerated among service providers, with manufacturers indicating the first rise in staff numbers since February," Markit said in its report.
• “Total new business rose for the first time since February and at a solid rate. Manufacturing firms registered a steeper expansion in new order inflows than in July, while service providers signaled a renewed increase in sales."

Yes, but: PMI numbers only measure month-to-month change and whether businesses say things got better or worse. The surveys do not account for the amount of change, so they don’t show how much ground still needs to be made up after steep declines that began in March.