Despite the weakness in 'hard' industrial production data, US Manufacturing 'soft' survey data from ISM and Markit surged in November and December. PMI rose to 54.3 final for December – a 21-month high – with employment rising and inventory-building. However, stagflation concerns continue to build as new orders declined and input price inflation accelerated. ISM rose to its highest since Dec 2014 with prices paid soaring to the highest since June 2011.
Spot the difference between 'hard' and 'soft' data…
As Stagflation looms…
The breakdown shows the surge in pries paid…
Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
“The manufacturing sector ended 2016 on a buoyant note, with promising signs that growth could pick up further in 2017.
“The pace of growth signalled by the PMI in December was the strongest for almost two years, and the combination of improving current demand and optimism for a further upturn in 2017 prompted companies to build inventory and boost capacity. The latter was reflected in the largest rise in factory payroll numbers for one and a half years.
“The upturn is being driven almost entirely by rising demand from domestic customers, with exports stymied by the dollar’s recent surge.
“The improvement in the survey data raises hopes that the official data will soon likewise show signs of the manufacturing sector’s recent malaise lifting.
The latest official data showed manufacturing output stagnant compared to the start of the year, but the December PMI is consistent with production growing at an annualised rate approaching 4%.”
via http://ift.tt/2iuZYB2 Tyler Durden