Having fallen 4 months in a row in December to its lowest since last January, one could have been forgiuven for expecting the ubiquitous hope-driven bounce we so often see in soft-survey-based data and sure enough, Markit's US Manufacturing PMI eked out a very small (53.9 vs 53.7 previous) rise in January - hovering at practically one-year lows. On the heels of China's disappointment, it appears the cleanest dirty short of America is not decoupling too much (if at all). This is not the "crisis has passed", "economy is strong" narrative-confirming data that Obama and The Fed would have everyone believe and as markit notes, “Manufacturing remains in a lower gear compared to that seen last summer... adding to the suspicion that the pace of economic expansion in the first quarter could even fall below the 2.6% rate seen in the final quarter of last year."
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Chart: Bloomberg
As Markit explains,
“Manufacturing continued to expand in January, but the sector remains in a lower gear compared to that seen last summer. Factory output growth and job creation remain well below last year’s peaks, adding to the suspicion that the pace of economic expansion in the first quarter could even fall below the 2.6% rate seen in the final quarter of last year.
“The fear is that the economy will become increasingly reliant on the consumer to sustain growth, which is another reason besides the economic slowdown to believe that policymakers will be wary of raising household’s borrowing costs via rate hikes any time soon.”
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Moar stimulus, moar free money oir wecannay hold it Jim...
