Recovery, we have a problem... November's Flash US Manufacturing PMI printed a 10-month lows 54.7, missing expectation sof 56.3 by the most on record and tumbling for the third month in a row. The last 2 mnths have seen the biggest drop since June 2013 ands as Markit notes, suggests a further drop in GDP growth expectations of only 2.5% in Q4. Output is down for the 3rd straight month and Surprise!! Export market weakness is being blamed... as it seems the US cannot decouple from the rest of the world's slump after all and is - as we have explained numerous times - merely on a lagged cycle.
“The manufacturing sector is undergoing a marked slowdown in the fall after enjoying a buoyant summer.
Output growth has now fallen for three straight months, taking the pace of expansion down to its lowest since the start of the year. Unlike January, however, this time the weaker rate of growth can’t be blamed on the weather.
Export market weakness holds the key to the recent slowdown, with manufacturers reporting the largest drop in export orders for nearly one and a half years.
“There’s some reassurance from manufacturers continuing to boost their payroll numbers at a robust pace, but with backlogs of work showing almost no growth, the rate of job creation looks likely to moderate in coming months unless new order inflows pick up again.
“The manufacturing and service sector PMI data available so far point to GDP growth slowing to around 2.5% in the fourth quarter.”
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So - in summary - China PMI is at 6-month low, Europe at 16-month low, Japan dropped and is in a quadruple-dip recession, and now US manufacturing is at 10-month low... seems like QE really worked eh!?
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We're gonna need more Fed-fueled subprime-auto-loan malarkey to keep this dream alive.