For the 3rd month in a row, US Manufacturing PMI dropped from 4-year highs to 10-month lows. At 54.8, missing expectations of 55.0 (and down from 55.9) for the 5th month of the last 6 as extrapolated hopes fade into the usual cyclical un-decoupled collapse into year-end (but ignore NRF data). Sadly for the bullish decoupling meme, Markit notes, "the principal cause of the slowdown is a renewed downturn in export orders, which fell for the first time since January." So, amid all of this doom, ISM then beat expectations, printing 58.7 vs 58.0 expectations (down slightly from October's 59.0 print) led by - rather ironically - new export orders surging... US data has gone full China.
US Manufacturing PMI tumbled to 10-month lows
[6]
As Markit notes, this is not a pretty picture:
“What’s more, with inflows of new orders slowing sharply, there’s a good chance that production growth will deteriorate further in December.
“The principal cause of the order book slowdown is a renewed downturn in export orders, which fell for the first time since January. Demand from many emerging markets remains well down on pre-crisis levels, and a deteriorating situation in the Eurozone has hit trade flows to Europe.
“Unless order book growth picks up, factories will inevitably soon turn to cutting jobs in order to bring capacity down in line with weaker demand.”
And then ISM beat.. led by export orders!!!!
[7]
Business activity fell to 58.7 vs 59.0 last month
* New orders rose to 66 vs 65.8 last month
* Employment fell to 54.9 vs 55.5 last month
* Supplier deliveries rose to 56.8 vs 56.2 last month
* Inventories fell to 51.5 vs 52.5 last month
* Customer inventories rose to 50.0 vs 48.0 last month
* Prices paid fell to 44.5 vs 53.5 last month
* Backlog of orders rose to 55.0 vs 53.0 last month
* New export orders rose to 55.0 vs 51.5 last month
* Imports rose to 56.0 vs 54.5 last month
Note that for the first time since July 2013, prices paid dropped below 50.
Of course - the new orders resurgence is entirely seasonally-adjusted idiocy...
[8]
WHAT RESPONDENTS ARE SAYING...
"The Holiday Season continues to exceed expectations. Customers are generally optimistic for future sales growth." (Food, Beverage & Tobacco Products)
"Continued strong demand. Deliveries through the West Coast are delayed due to a number of factors." (Fabricated Metal Products)
"We have seen continued growth in transportation equipment. Slowdowns and threats of strike of West Coast longshoreman weigh heavily on U.S. operations." (Transportation Equipment)
"Business continues to be stronger than last year." (Furniture & Related Products)
"Improvement in defense spending and manufacturing." (Computer & Electronic Products)
"West Coast port longshoreman slowdown is affecting business with longer lead times." (Chemical Products)
"We continue to hire people. People are also leaving to take other jobs indicating the job market is starting to improve for manufacturing." (Electrical Equipment, Appliances & Components)
"Market has remained strong going into year-end." (Wood Products)
"Order intake has been substantial, resulting in a very healthy backlog. The packaging automation requirements in the food and beverage market are robust." (Machinery)
"Demand remains strong for new orders." (Miscellaneous Manufacturing)
Simply put, absolutely every single respondent was bullish...
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Charts: Bloomberg
