Not even the seasonally-adjusted sentiment surveys can give a glimmer of hope any more. A few weeks after the July ISM manufacturing report printed at the lowest since March, moments ago the Markit mfg PMI index was released, printing at justt 52.9, below the expected 53.8, and down from last month's 53.8. This was the lowest level since October 2013 and the biggest miss in exactly 2 years, with output, new orders and employment all expand at slower rates in August; Markit adds that "Input cost inflation picks up fractionally, but remains well below the survey average."
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The report also notes that the latest rise in production volumes was the weakest since the weather-related slowdown recorded in January 2014 - perhaps someone can blame it on the record hot July. Some survey respondents cited a cyclical slowdown in new business growth, as well as heightened uncertainty regarding the demand outlook in August.
But wait, the financial comedy TV said China can not possibly affect the US. Just chalk it up to the latest thing the economists were wrong about.
Most notably, now that even highly subjective survey data can no longer be rigged to boost confidence, there is only one recourse: beg and plead for the Fed to not hike rates or better yet, as Bank of America did overnight, just hint that QE4 is just around the corner if the market crashes enough. To wit, commenting on the flash PMI data, Tim Moore, senior economist at Markit said:
“August’s survey highlights a lack of growth momentum and continued weak price pressures across the U.S. manufacturing sector, which adds some fuel to the dovish argument as policymakers weigh up tightening policy in September.
“With the headline PMI swiftly losing ground after a modest rebound during July, the latest figure now points to the weakest overall pace of manufacturing growth for almost two years.
“According to survey respondents, the strong dollar continued to put pressure on export sales and competitiveness, while heightened global economic uncertainty appeared to have dampened client spending both at home and abroad. Alongside this, manufacturers of investment goods widely cited growth headwinds from the slump in capital spending across the energy sector.
“Sluggish manufacturing demand conditions and subdued cost pressures resulted in further restraint in terms of factory gate prices during August. Output charge inflation has broadly flatlined this summer and remains close to its lowest recorded by the survey over the past three years.”
In fact, best just to do QE4, cause this time it will be different.
