On the heels of the biggest miss on record for US Manufacturing PMI [4] (which corresponded un-decoupling-ly with disappointing European and Chinese Manufacturing PMIs), Markit's Services PMI printed 56.3, missing 57.3 expectations and notably down from October's 57.1 to 7 month lows. As Markit notes, the index has now pointed to softer growth of business activity in each of the past five months, to signal a sustained loss of momentum since the post-crisis peak seen in June. What is even more worrying... Markit points out that the economic upturn has lost considerable momentum, and with extreme weather hitting parts of the country, growth could slow even further.
Services PMI ugly...
[5]
Which when added to the Manufacturing PMI suggests 2.5% GDP growth at best...
[6]
The entire soft-survey-based pop in H1 2014 has now been undone!
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Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said: [7]
“A fifth-consecutive monthly slowing in growth in the service sector adds to signs that the economic upturn has lost considerable momentum, though it’s important to note that the pace of expansion remains robust by historical standards
“After the manufacturing PMI showed factory output growth slowing in November to the lowest since January, the weaker pace of service sector expansion puts the economy on course to grow at a 2.5% annualised rate at best in the fourth quarter. With extreme weather hitting parts of the country, growth could slow even further.
...
“The worry is that any hiring intentions could rapidly deteriorate if firms’ order book inflows fail to pick up again soon.”
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We're gonna need a bigger QE
