Purchasing Managers Index
A survey-based indicator of economic health in manufacturing and services.
The purchasing managers index surveys business activity to signal economic expansion or contraction.
The purchasing managers index is a survey of business activity in manufacturing or services that signals whether the economy is expanding or contracting. A reading above 50 shows growth, below 50 shows contraction. It is a fast-moving economic gauge that traders follow closely.
How It Works
- Above 50 means growth, below means contraction
- It covers manufacturing and services
- It is a fast gauge of the economy
Trading Tips
Read it for the direction of the economy
Expect currency moves on surprises
Pair it with CPI for a fuller read
Purchasing Managers Index Example
Say manufacturing PMI prints 52.3 against 49.8 expected, back above the 50 expansion line. The currency rallies 40 pips in minutes as recession bets unwind. One survey respondent panel moved a national currency.
How Traders Use Purchasing Managers Index
Trade PMI surprises in the direction of the break above or below 50, then exit fast: the move fades within hours. Services PMI matters more for modern economies. Manufacturing moves nostalgia traders.
Related Terms
Put Your Knowledge Into Practice
Compare regulated brokers and find the best one for your trading style.