Despite a very marginal improvement (from 53.6 to 53.8), Markit US Manufacturing PMI remains stubbornly stuck at 19-month lows, unable to bounce from the weathewr-strewn, port-strike-ridden weakness of Q1. As Markit notes, "a modest upturn in the headline manufacturing PMI belies some more
worrying undercurrents which point to potential weakness in coming
months," and the slump in unemployment index suggests things are not well at all...
The broad index is unable to get a lift...
[4]
as employment tumbled...
[5]
As Markit reports,
“A modest upturn in the headline manufacturing PMI belies some more worrying undercurrents which point to potential weakness in coming months.
“Companies saw output and order book growth regain a little momentum at the start of the third quarter, but the overall pace of expansion was nevertheless the second-weakest seen since the government shutdown of 2013.
“Manufacturing has been stuck in a lower gear in recent months compared to the strong expansion seen through much of last year, linked to weak exports and uncertainty about the economic outlook at home and abroad.
“Although export orders showed the first rise since February, the rise was only very modest, blamed by companies on the appreciation of the dollar and sluggish global demand.
“Disappointing order book growth has taken its toll on companies’ expansion plans. Not only did firms scale back their input buying compared to prior months, with July seeing the smallest increase since the start of last year, hiring has also been hit, with headcounts rising at the slowest rate for three months.
“Weak demand, as well as reduced import costs arising from the strong dollar, meanwhile also continued to help drive down inflationary pressures.
“The survey data therefore suggest there’s little to worry policymakers from an inflation perspective, and that the forward-looking indicators point to the manufacturing sector remaining in a relatively slow-growth phase.”
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