Purchasing Managers Index (PMI)
A monthly survey of business activity across manufacturing and services — a leading indicator that moves markets before hard data arrives.
The Purchasing Managers Index (PMI) is a monthly survey of corporate purchasing managers that gauges business conditions across manufacturing and services. Readings above 50 indicate expansion; below 50 signal contraction. It is one of the earliest leading indicators available each month.
Because PMI data arrives before official GDP or industrial production figures, it often sets the initial market narrative for the month. A surprising drop in the PMI can shift rate expectations and trigger cross-asset moves well ahead of confirming hard data.
Related Terms
Business Cycle
The recurring sequence of economic expansion, peak, contraction, and trough that drives sector rotation, earnings cycles, and asset class returns.
IntermediateConsumer Confidence
A survey-based measure of households' optimism about the economy — a leading indicator of consumer spending, which drives ~70% of U.S. GDP.
BeginnerGross Domestic Product (GDP)
The total monetary value of all goods and services produced within a country in a given period — the headline measure of economic size and growth.
BeginnerLeading Indicator
An economic data point that tends to move before the broader economy — useful for anticipating turning points before they show up in lagging hard data.
IntermediateRecession
A significant economic contraction — commonly defined as two consecutive quarters of negative GDP growth — that hits corporate earnings and risk assets hard.
Beginner