US Manufacturing Dipped (Or Bounced) In May As Prices Paid Hits 7 Year Highs

US Manufacturing dipped in May, according to Markit's final PMI print, sliding from its preliminary print; but US Manufacturing bounced in May, according to ISM, as Prices Paid (highest in 7 years), New Orders, and Employment all jumped.

Decide which one you like...

ISM Prices Paid and New Orders diverged in the last few months but New Orders bounced in May...

 

Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The US manufacturing sector enjoyed another bumper month in May, though continues to run hot.

The past two months have seen the strongest back-to-back improvements in order books since the fall of 2014, fueled by strengthening domestic demand. New orders have in fact now grown at a faster rate than output in each of the past five months, highlighting how producers have struggled to boost production to meet sales. In the words of one manufacturer, “we’re selling more than we can make”.

“The upturn has stretched supply chains to the extent that May saw the greatest lengthening of delivery times in the near-ten year history of the survey. Producers are also finding it difficult to find suitable staff.

With sales growing faster than production, backlogs of work are accumulating at the fastest rate for nearly four years, which should support further production growth in coming months. Business expectations regarding future production in fact picked up again to one of the highest levels seen over the past three years, adding to signs that strong growth will persist through the summer months.”

So everything is awesome - which is odd given the slump in actual 'hard' economic data...