PMIs

PMIs, or Purchasing Managers' Indexes, are a family of economic indicators derived from monthly surveys of purchasing managers. They are designed to provide a timely snapshot of the economic health of the manufacturing sector, and, in some cases, the services sector. The most widely circulated PMIs are the Manufacturing PMI and the Services PMI. They are produced by organizations such as the Institute for Supply Management (ISM) in the United States and S&P Global (formerly Markit) for other regions. The index is based on a diffusion method, with components including new orders, production, employment, supplier deliveries, and inventories. Readings above 50 signal expansion, while readings below 50 indicate contraction. PMIs are considered leading indicators for GDP growth and inflation trends, and are closely watched by policymakers, investors, and analysts. Data are released monthly, often with revisions, and may be benchmarked across different countries to provide international comparisons. Methodological differences between PMIs can affect cross-country interpretation, such as survey panel composition and weighting of subcomponents.

PMIs may also refer to private mortgage insurance, commonly known as private mortgage insurance or PMI. This form of insurance protects lenders against losses if a borrower defaults on a mortgage with a loan-to-value ratio above a certain threshold, typically 80 percent. It is usually required on conventional loans with down payments of less than 20 percent. Borrowers pay PMI premiums, which can be charged monthly and may be cancelled once the loan-to-value ratio falls to 78 percent (subject to lender policies) or when the borrower reaches 22 percent equity and meets payment history requirements. PMI differs from mortgage insurance funded by government programs (such as FHA mortgage insurance) in cost structure and eligibility.