January's brief 'hope' bounce following 3 months of weakness is long forgotten as February's Chinago PMI crashes to 45.9 (missing expectations of 57.5) - its lowest since July 2009. This is the biggest MoM drop since Lehman in Oct 2008. New Orders suffered the largest monthly decline on record, leaving them at the lowest since June 2009. Seems like it is time to blame the weather... PMI says it is "difficult to gauge magnitude of weather and port strike" but blames it nonetheless.
The biggest drop since Lehman (and 2nd biggest since 1980)...
* * *
- Forecast range 55 - 59.6 from 43 economists surveyed
- Prices Paid rose compared to last month
- New Orders fell compared to last month
- Employment fell compared to last month
- Inventory rose compared to last month
- Supplier Deliveries rose compared to last month
- Production fell compared to last month
- Order Backlogs fell compared to last month
- Business activity has been positive for 11 months over the past year.
Commenting on the Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said,
“It’s difficult to reconcile the very sharp drop in the Barometer with the recent firm tone of the survey. There’s some evidence to point to special factors such as the port strike and the weather, although we’ll need to see the March data to get a better picture of underlying growth.“
* * *
"The West Coast port strike and the harsh winter probably had a negative impact in February, although it is difficult to gauge the magnitude."
Here - let us help - Snow Impact here and Port Strike Impact here...
* * *
Sure enough the "fault" lies on the weather.... (but didn't the economists know it was cold? and know about the port strikes?)
And cue the GDP downgrades and demands from the sell-side that Yellen delay rate hikes...
- *HATZIUS SEES `GOOD ARGUMENT' FOR FED MOVE AFTER SEPT.