- Lowest since Oct
- Final December manufacturing reading was 57.7
- Manufacturing optimism about the year ahead at the highest in over a year
- Services 50.9 vs 55.0 expected
- Prior services was 57.6 -- lowest since June
- Composite 50.8 vs 56.9 expected
- Prior composite 57.0
- Weakest new orders since Dec 2020
- Input inflation slowest since March 2020
This is a poor reading and comes with the market vulnerable. On services, the report said "labor shortages, employee absences and the Omicron wave reportedly weighed on growth".
Comments from IHS Markit economist Chris Williamson:
"Soaring virus cases have brought the US economy to a near standstill at the start of the year, with businesses disrupted by worsening supply chain delays and staff shortages, with new restrictions to control the spread of Omicron adding to firms’ headwinds.
“However, output has been affected by Omicron much more than demand, with robust growth of new business inflows hinting that growth will pick up again once restrictions are relaxed. Furthermore, although supply chain delays continued to prove a persistent drag on the pace of economic growth, linked to port congestion and shipping shortages, the overall rate of supply chain deterioration has eased compared to that seen throughout much of the second half of last year. This has in turn helped lift manufacturing optimism about the year ahead to the highest for over a year, and has also helped bring the rate of raw material price inflation down sharply. Thus, despite the survey signalling a disappointing start to the year, there are some encouraging signals for the near-term outlook ”
