The OpenEDITOR'S NOTE: Don't Miss a Beat! Sign-up for the Kitco News Weekly Roundup– our newsletter highlighting our most popular features, articles and videos! Register Here
Updated: U.S. Flash PMI Falls To 53.7 In December
By Kitco NewsTuesday December 16, 2014 9:45 AM
Editor's Note: The article was updated to include more information from the report.
(Kitco News) - The U.S. manufacturing sector continues to lose steam in December, adding to weakness reported in November, according to the latest Purchasing Managers Index data.
Tuesday, the private research firm Markit said its November flash estimate PMI fell to a level of 53.7, compared to November’s final reading of 54.8. According to consensus reports, economists were expecting to see a small rise to 56.1.
Although the data showed that the sector continues to expand, the report noted that output and new orders fell to its weakest point in 11 months.
"Anecdotal evidence from survey respondents suggested that a moderation in new business gains in recent months had contributed to softer output growth at their plants," the report said.
Looking at the components of the report, output fell to a reading of 54.7, down from November’s level of 55.6. The employment index fell to 52.8, down from last month’s reading of 55.1. The report noted that employment growth is at its lowest point since July.
“Softer output and employment numbers merely represent a cooling in the pace of expansion from unusually strong rates earlier in the year, but also send a warning light to policymakers that the fourth quarter is likely to see a weakening in the pace of economic growth, which is starting to hit hiring,” said Chris Williamson, chief economist at Markit. “We expect this weakening to become evident in the official data early in the new year, meaning rate setters will continue to err on the side of caution in terms of when the economy may be ready for higher interest rates, especially as the survey data also highlight a further drop in inflationary pressures.”
A reading above 50.0 signals an improvement in business conditions, while readings below 50.0 signal deterioration.
The health of the U.S. manufacturing sector appears to be uncertain as recent data has been mixed. On Monday the Federal Reserve of New York reported that its December regional manufacturing survey fell into negative territory for the first time in almost two years, dropping to negative 3.6. However, on the same day the Federal Reserve reported that the nation’s factory output in November rose 1.1%, rising above pre-recession levels.
By Neils Christensen of Kitco News; nchristensen@kitco.com
 |
Discuss on Kitco Forums
