Flash PMIs Show US, UK and Eurozone Growing Faster With Cooling Inflation

Purchasing managers' index (a monthly survey of business activity) data released for August showed a consistent theme across three major economies. The US flash PMI signaled a mix of hotter output growth and cooler inflation. The UK flash PMI pointed to stronger economic growth and improved business confidence for the month. The eurozone flash PMI showed cooler inflation alongside sustained expansion of output. The alignment matters because central banks on both sides of the Atlantic have spent much of the past two years trying to slow inflation without tipping their economies into recession. Flash PMIs, which survey purchasing managers before final data is compiled, are watched closely because they arrive weeks ahead of official growth and inflation figures and often move rate expectations. What remains unresolved is whether the softer inflation readings hold up once final PMI figures and hard economic data are published. A single month of survey data is not a trend, and none of the three reports specified the numerical PMI level reached.