With US economic data at its most disappointing in 18 months, it should not be surprising that Markit’s US Manufacturing PMI plummeted to 53.0 in February – its lowest since August 2017.
Under the hood in the PMI data, new orders tumbled to 52.7 (lowest since June 2017), and output slowed to its weakest since Sept 2017.
ISM’s Manufacturing survey rebounded in January (like PMI) after December’s plunge, and was expected to slide back modestly in February, but it didn’t – it plunged back to cycle lows…54.2 – the lowest since Dec 2016
ISM Prices Paid contracted (49.4) for the second month in a row as new orders and employment stumbled.
Chris Williamson, Chief Business Economist at IHS Markit said:
“The PMI indicates the US manufacturing sector is growing at its weakest rate for one and a half years, with firms reporting a marked easing in production growth in February, linked to a similar slowdown in order book growth.
“The survey exhibits a strong advance correlation with comparable official data, and suggests that factory production and orders growth rates are close to stalling mid-way through the first quarter, albeit in part representing some pay-back after a strong January. Export markets remained the principal drag on order books.
“Having seen demand grow faster than production through much of 2018, order book and output trends have come back into line in recent months, hinting at an alleviation of capacity constraints as demand cools. Backlogs of works barely rose as a result, and price pressures have likewise moderated, though tariffs were again reported to have pushed costs higher. Hiring has consequently also slowed.
“Worries regarding the impact of tariffs and trade wars, alongside wider poltical uncertainty, undermined business confidence, with expectations of future growth running at one of the most subdued levels seen for over two years and suggesting downside risks prevail for coming months.“
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Of course, this is just the kind of bad news the stock market will love – shitty US manufacturing means Powell’s on hold for longer (and/or QE or rate-cuts imminent), which can only be great for stocks, right?!!
via ZeroHedge News https://ift.tt/2EHNv85 Tyler Durden