And so, the predicted gradual softening of the economy is starting to materialize in order to fit with the Chairman's world view (and to set the stage for QE X with a healthy helping of LSAPs). The January Chicago PMI [4]just printed at 60.2, missing expectations of an increase to 63, and down from December's 62.2. And it gets worse: the employment index was the lowest since August at 54.7, while the order backlog number came at 48.2, the lowest since October 2009. This also means that the upcoming manufacturing ISM will also likely be a miss. What recovery again? Or is it China's turn to bail out the world all over again.
- New orders 63.6 in Jan. after 67.1 in Dec.
- Production 63.8 after 64.9
- Backlogs 48.3 after 57.3
- Inventories 51.6 after 52.0
- Employment 54.7 after 59.2
PMI:
and Employment:
Here is what the respondents are saying:
- Our customers projected production levels are to increase substantially the next two years. There is still an issue of capacity at the mills and refineries to support this increase.
- The amount of orders and machines we are building are UN-characteristically slow in the 4th quarter and going into the 1st quarter of 2012. Not sure why, but it is.
- Because our customers are prime defense and aerospace contractors business has declined because of a lack of a federal budget.
- Backlog of orders remains at near record levels going back more than 20 years. Quotes remain strong -- looks like another record year. Pricing for raw material may be starting to increase.
- Steel prices flat year on year, decreases in most chemicals make for a great start in 2012. Despite lower sales volume, profitability is strong due to tight control & strong purchasing performance.
- The talk indicates a busy quarter, but there seems to be some hesitations when it comes to getting the releases or orders out.