A quick look at the US PMI and new home sales

The October US PMI rose a touch from September to 54.3 from 54. Manufacturing remained below 50 but was up at 47.8 from 47.3. Services continue to hold everything up at 55.3 vs 55.2 but keep in mind, this does not include retail for some reason as opposed to the ISM services index which does. 

With services, new orders led the strength "fueled by rising domestic demand, which offset a marginal fall in export orders for services." With respect to the labor market, "The decline in service jobs was meanwhile only very modest, and often linked to the non-replacement of leavers rather than layoffs." This matches with what we're seeing in the jobless claims data outside of the two week spike for initial claims. 

On the inflation front, "The rate of selling price inflation cooled especially sharply in the service sector, down to its lowest for almost 4 1/2 years." Input prices did ease but still "remained elevated by historical standards" and "well above the pre-pandemic average." Higher wage costs relative to pre Covid are a key reason. 

In the manufacturing sector, new orders "fell at a reduced rate" but "the rate of loss of orders remained steep, with weaker than anticipated sales also often having caused an unplanned rise in unsold stock levels." Inventories rose as a result. Employment fell but "the drop in headcounts was smaller than reported in September."