PMI Plunges - The Last Time US Manufacturing Was This Weak, Bernanke Hinted At QE3

Tyler Durden's picture

On the heels of weakness in the rest of the world's PMIs, US Manufacturing just printed 51.0 (missing expectations of 52.4) and tumbling to its lowest since October 2012... followed rapidly by Bernanke hinting at QE3. While Markit does 'blame the extreme weather', it notes however that "every indicator from the flash PMI survey, from output, order books and exports to employment, inventories and prices, is flashing a warning light about the health of the manufacturing economy."

Not good...

Even worse...


Chris Williamson, chief economist at Markit said:

“US factories are reporting the worst business conditions for over three years. Every indicator from the flash PMI survey, from output, order books and exports to employment, inventories and prices, is flashing a warning light about the health of the manufacturing economy.


Output and order books are growing at one of their slowest rates since late-2012, with exports falling amid weakened global demand and the strong dollar. Hiring has weakened as a result. With backlogs of work slumping to the greatest extent since the height of the recession in 2009 and inventories rising for the third successive month, it’s likely that firms will come under increasing pressure to cut payroll numbers and production in coming months unless demand revives.


Prices are meanwhile falling at the fastest rate since mid-2012 as firms compete to win or retain customers.


The one caveat is that the survey was conducted in a month in which parts of the US suffered extreme weather. However, few survey respondents reported that the weather had a material impact on business over the month, instead often simply observing a general slowdown in trade and the economy.”

And with Services now tumbling also, what excuse will the permabulls have next...


Charts: Markit and Bloomberg

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NoDebt's picture

I'm so glad we don't have any manufacturing in the United States any more or this would be very troubling.


Cognitive Dissonance's picture

All those waitresses and bartenders manufacture their 'product'. Does that count?


Father Thyme's picture
Father Thyme (not verified) Cognitive Dissonance Feb 22, 2016 10:02 AM

bartenders manufacture their 'product'.

Does pouring cheap booze into top shelf bottles count as manufacturing?

Grandad Grumps's picture

There was seemingly a conscious decision to "include", first Japan, then the 4 tigers and then China in the global economy and hence enslave them with interdependence.

Manufacturing, using value adding labor, is a growth engine. When one takes it away, one has to do something with the people ... typically they become "service" worker, or make-workers, such as the TSA and other government minions.

Father Thyme's picture
Father Thyme (not verified) NoDebt Feb 22, 2016 9:58 AM

Speed Queen in Wisconsin added another shift.

Make high quality stuff that works great and lasts a long time, and smart people will figure it out and buy it, gladly.

MSimon's picture

Speed Queen - an oz of crystal meth with every purchase. Value bitchez.

valley chick's picture

Sounds about right. I joined the speed queen fan group and had to find a retailer that was not back ordered to purchase.

froze25's picture

Thanks for the info, I didn't know made in the USA washer / dryers were an option till now. Thank you very much I will keep this in mind when my current dryer goes.

Grandad Grumps's picture

I like Speed Queen.

Back when I was younger my father outfitted and did all (most) of the interiors of the Speed Queen laundromats in the Chicago area. He built a couple for himself ... and I got to know how to repair the 12-lb and 20-lb washers as well as the driers (and the vending machines).

Life was good. Life was simple.

BullyBearish's picture

Wait...don't they know that higher interest rates and more expensive energy is GOOD for manufacturing??

open-range's picture
open-range (not verified) NoDebt Feb 22, 2016 1:42 PM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

NoDebt's picture

Time to raise rates.

venturen's picture

Manfacturing falls so rescue bankers in NY? 

NoDebt's picture

When that realization fails to shock you any more, you're about halfway to understanding how this game really works.

Father Thyme's picture
Father Thyme (not verified) NoDebt Feb 22, 2016 10:15 AM

If _____(Fill in the Blank)_______, then rescue bankers in NY.

It's just that easy.

NoDebt's picture

Markit is peddling fiction.  They better watch out for Obama's wrath.

Seasmoke's picture

So QE4 is bad for Gold ..... correct ???

Just want to make sure I understand this ahead of time what I've witnessed the past 5 years (and every reason I bought Gold is now the opposite.)

herkomilchen's picture

Schiff thinks QE4 will be good for gold, because announcing QE4 on the heels of the all-is-well rate hike will break Fed credibility.  I think that may be optimistic.  I think he overestimates how many people recognize what the consequences of all this money printing will be.

I think if QE4 is announced money may exit gold in droves to plunge into stocks chasing yield.  Greed will trounce fear at the prospect of riding the next big bubble expansion that made so many people so rich over the last 7 years.

DogeCoin's picture

QE4 will be good for gold, not bad. Schiff isn't overestimating anything. Once QE4 is announced and implemented USD will drop hard, which would mean the USD price of gold will soar as a response. More importantly, QE4 would signify to the rest of the world that US recovery was merely an illusion and that all the previous rounds of QE resulted in nothing but quantative failure. Foreigners will no longer think of the USD is a safe haven and sell USD and US debt even more so than they already are, plus if USTs are either yielding negative or near 0, what's the appeal of investing in US debt? Sure, investors back home in the US might go momentum chashing the stock market, but that's meaningless if the value of USD dramatically declines because of QE4ever.

Infield_Fly's picture
Infield_Fly (not verified) Feb 22, 2016 10:01 AM

Wicked men, you face the Tick!!

Racer's picture

"Markets" just adore this dreadful news

CHoward's picture

"Extreme weather".  I'm in the U.S. - where are these people?!

Stormtrooper's picture

I'm in the US too. We had 3" snow one day last week. Should be a good excuse for the next couple of months.

Grandad Grumps's picture

**The Last Time US Manufacturing Was This Weak, Bernanke Hinted At QE3**

It's not so bad then. Most likely if one took commodity deflation out of the equation, then the economy would be doing well.

yogibear's picture

The Fed will feel that it has to do an even larger QE4. When it does the dollar will drop like a rock.

Hohum's picture

We still have debt and that's what counts.