March prelim Markit manufacturing and services PMIs
- Record low for services PMI
- Prior was 49.4 prior
- Markit manufacturing PMI 49.2 vs 43.5 expected
- Prior manufacturing PMI 50.7
- Composite PMI 40.5 vs 49.6 prior
The manufacturing PMI is a surprise but the market is likely to shrug it off, similar to the German one earlier today.
Commenting on the flash PMI data, Chris Williamson,Chief BusinessEconomist at IHS Markit,said:
"US companies reported the steepest downturn since 2009 in March as measures to limit the COVID-19 outbreak hit businesses across the country. The service sector has been especially badly affected, with consumer-facing industries such as restaurants, bars and hotels bearing the brunt of the social distancing measures, while travel and tourism has been decimated. However, manufacturing is also reporting a slump in demand, with production falling at a rate not seen since 2009, linked to either weak client demand, lost exports or supply shortages.
"Jobs are already being slashed at a pace not witnessed since the global financial crisis in 2009 as firms either close or reduce capacity amid widespread cost-cutting.
"The survey underscores how the US is likely already in a recession that will inevitably deepen further. The March PMI is roughly indicative of GDP falling at an annualised rate approaching 5%, but the increasing number of virus-fighting lockdowns and closures mean the second quarter will likely see a far steeper rate of decline."
