September Flash PMI Hits Highest Inflation Since Oct 2022
Strong job growth and rising input costs in the new PMI data suggest persistent inflation pressure for the Federal Reserve.
Key points
- September Flash PMI shows employment growth at its fastest pace since June 2022.
- Input costs rose to their highest level since October 2022 due to fuel and transport.
- TheStreet Pro increased portfolio cash to over 12% citing margin pressure risks.
September Flash PMI data released at 9:45 a.m. ET showed strong economic activity. The report revealed higher inflation and faster job growth than expected.
Stocks fell and Treasury yields rose on the news. TheStreet Pro notes the data confirms inflation remains the Fed's primary concern.
Employment Growth Accelerates Sharply
Job creation rose at the fastest pace since June 2022. This marks a rare acceleration in the labor market over the last decade.
Service sector payrolls grew at their quickest rate since mid-2022. Manufacturing employment expanded to its highest level since February 2021.
Input Costs Hit Two-Year High
Average input costs surged to the highest rate since October 2022. Higher fuel and transport costs drove much of this increase.
Manufacturing firms faced supply shortages that lengthened delivery times. These delays were the most widespread recorded since July 2022.
Margin Pressure Builds In Q3
Selling price inflation remained lower than input cost increases. This gap threatens corporate profit margins in the coming earnings season.
Negative pre-announcements from Nucor and Steel Dynamics support this view. Analysts now question lofty earnings expectations for late 2026 and 2027.
The Street Pro portfolio raised cash levels to over 12%. Managers are waiting for quality shares to drop during the Q3 2026 earnings period.
