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US Manufacturing PMI Tumbles To Lowest In 16 Months As New Orders Tumbled

Submitted by Tyler Durden on 05/21/2015 09:52 -0400

Having dipped and missing by the most on record in April, Markit's US Manufacturing PMI printed 53.8 (against expectations of 54.5). This comes on the heels of weakness in European PMIs (especially Germany - but but but lower EUR... exports, growth, etc...) and Chinese PMIs. This is the lowest US Manufacuring PMI since Jan 2014 (in the middle of the polar vortex). May saw the slowest rise in new orders since Jan 2014 - but the post-weather rebound? - and input costs rrise for the first time in 2015. Markis now carefully noting that "the survey is likely to encourage policymakers to err on the side of caution."

As Markit explains,

“Manufacturers reported their weakest growth since the start of 2014 in May, with the survey results ad ing to fears that the strong dollar is weighing on the US economy and hitting corporate earnings.

Although falling only modestly, export sales have now dipped for two straight months, something not seen for two years and a far cry from the solid export performance seen this time last year. Overall order books are consequently growing at the slowest rate seen since the start of last year.

“The weaker order book trend doesn’t appear to have affected hiring, at least not yet, with job creation picking up in May. However, unless production growth revives there is a worry that payroll growth will slow as companies seek to boost productivity.

“Higher oil prices are meanwhile pushing up firms’ input costs for the first time so far this year, but producers seem to have been able to pass the increase on to customers. However there are few signs of any significant upturn in inflation.

“Despite signs of price pressures picking up, the survey is likely to encourage policymakers to err on the side of caution, especially in relation to any further damaging impact of the stronger dollar on growth and earnings if policy were to be tightened. Any decision on hiking interest rates is therefore likely to be put off until later in the year.”

Charts: Bloomberg

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Thu, 05/21/2015 - 09:55 | 6117047 kw2012

But Liesman said just today that GDP in 2Q will be 2.5%

Thu, 05/21/2015 - 09:57 | 6117054 VinceFostersGhost

Service jobs, mostly hookers.

Thu, 05/21/2015 - 09:57 | 6117059 Headbanger

But but... Goldman says no slack left in the economy..

Thu, 05/21/2015 - 09:58 | 6117062 Clueless Economist

My barber’s Brother in law’s Nephew with a BS in Labor Studies works part time 29.5 hours a week at Home Depot and has a monthly take home check of $681.45.

If you want in on this great part time job go to PartTimeObama.com and sign up!

Thu, 05/21/2015 - 10:06 | 6117067 kaiserhoff

Unless I missed it , ZH hasn't done anything yet on the massive air bag recall as in 30 million vehicles.

Could be bad news for Honda, and more bad news for Japan Inc.

Thu, 05/21/2015 - 10:14 | 6117119 Headbanger

Old news, isn't it?

Thu, 05/21/2015 - 10:22 | 6117143 kaiserhoff

Not really. They have been negotiating with regulators for some time, but looks like 8 ghastly deaths already from this thing, and the recall order is final.

Will probably bankrupt Tanaka, and then hit the car makers. Just saw the rough data, but it looked like most of Honda's sales for a 10 year period were affected.

Mucho dinero, hombres.

Thu, 05/21/2015 - 11:35 | 6117465 KnuckleDragger-X