Revisions to the December Markit US PMI

Markit US PMI

  • Prelim reading was 52.5
  • Nov final reading was 52.6
  • New orders 53.1 vs 53.2 prelim (53.6 prior)
  • Nine-month high in input price inflation
  • Output price inflation rose to highest since Feb
  • Full release

Chris Williamson, Chief Business Economist at IHS Markit said:

"The US manufacturing sector continued to recover from the soft-patch seen in the summer, ending 2019 with its best quarter since the early months of 2019.

"The overall rate of expansion nevertheless faltered somewhat in December and remains well below that seen this time last year, suggesting producers are starting 2020 on a softer footing than they had enjoyed heading into 2019.

"Business sentiment about the outlook remains especially subdued compared to a year ago, reflecting ongoing worries about geopolitics and trade wars, especially the impact of tariffs, as well as fears that political and economic uncertainty surrounding the 2020 elections could dampen demand.

"The impact of tariffs was clearly evident via higher prices, while the relatively subdued level of business confidence manifested itself in a pull-back in hiring, hinting at risk aversion and cost-cutting."

The comentary is mixed. It's clear that manufacturing isn't doing as well as it was a year ago but this survey is a bit of an outlier. Other manufacturing surveys show sentiment closer to the lows from the summer, especially abroad. At what point do we start to worry that low rates and a trade war truce aren't leading to a manufacturing pickup? I'll give it 2-3 months.