Latest / Markets with Megan: A Quick Financial Markets Update / New Orders Surge, Costs Rise | S2 E093 | 11-05-25

Transcript

New Orders Surge, Costs Rise | S2 E093 | 11-05-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The service sector's back in expansion tour territory.
• 0:03
  Megan Horneman: It's Wednesday, November the 5th, and this is Markets with Megan.
• 0:06
  Megan Horneman: If you like this podcast, you can subscribe, hit the alarm bell, share with friends, family, or colleagues.
• 0:11
  Megan Horneman: But we're here today to go through some of that very limited economic data that we're getting while we were in the longest US government shutdown now on record.
• 0:20
  Megan Horneman: But we continue to get information from the ISM reports, and we got manufacturing earlier this week.
• 0:27
  Megan Horneman: Now we've got the service side of the economy.
• 0:30
  Megan Horneman: And we know that services makes up the majority of spending in this in the economy.
• 0:35
  Megan Horneman: So this is an important report.
• 0:36
  Megan Horneman: It came in for the month of October slightly better than expected.
• 0:40
  Megan Horneman: It's now back in expansion territory, which is a level above 50.
• 0:44
  Megan Horneman: And when we look at the categories in this index, six of the 10 of the categories rose.
• 0:49
  Megan Horneman: And it was led by new orders.
• 0:52
  Megan Horneman: New orders now are looking like it might be some of these new orders that are from the data centers.
• 0:58
  Megan Horneman: And this is what we're getting from some of the comments out of the report.
• 1:02
  Megan Horneman: Some of the other areas, the business activity or what's considered really factory output, that also saw a big increase.
• 1:09
  Megan Horneman: Employment, it still is in contraction territory, but it did rise a little bit.
• 1:14
  Megan Horneman: And we're not seeing, you know, contracting employment with a backlog of orders.
• 1:19
  Megan Horneman: So there might be some stabilization or some equilibrium here found from the labor market perspective.
• 1:24
  Megan Horneman: Now, where we continue to focus is on that prices paid component.
• 1:28
  Megan Horneman: And this does worry us because this is where inflation comes from, and this is maybe some of the tariff impact.
• 1:35
  Megan Horneman: But you're looking at the prices paid component that rose to the highest level we've seen since October and 2022.
• 1:43
  Megan Horneman: So this is a big jump.
• 1:44
  Megan Horneman: This is something that should be concerning the Fed.
• 1:47
  Megan Horneman: Labor market's not really collapsing, still contracting, but not collapsing here in this report.
• 1:52
  Megan Horneman: And we did get some information from ADP showing a modest improvement in the month of October.
• 1:57
  Megan Horneman: So this is something the Fed should be taking a look at.
• 2:00
  Megan Horneman: Again, it's one month, it has been trending higher.
• 2:03
  Megan Horneman: So we'll continue to keep an eye on it.
• 2:05
  Megan Horneman: And does it filter into some of those other inflation indicators like CPI or PCE when we do eventually get this data from the government?
• 2:13
  Megan Horneman: That's all we have today.
• 2:15
  Megan Horneman: If you want a history of our podcast, you can go to marketswithmegan.fm.
• 2:18
  Megan Horneman: Thank you.