by Mish

Key Points

  • Headline PMI edges down again in May as production declines for the first time since September 2009
  • New orders expand at slowest rate in 2016 so far
  • Inflationary pressures pick up

Manufacturing Output

Image placeholder title

Manufacturing Employment

RECOMMENDED ARTICLES

Image placeholder title

Markit Chief Economist Chris Williamson’s Comments

  • “The weak manufacturing PMI data cast doubt on the ability of the US economy to rebound from its disappointing start to the year in the second quarter. The survey is signalling that manufacturing will act as a drag on economic growth in the second quarter, leaving the economy once again dependent on the service sector, and consumers in particular, to sustain growth.”
  • “Output is falling for the first time since the height of the global financial crisis, with factories hit by slowing growth of order books and falling exports. Backlogs of work are also dropping at the fastest rate since the recession, meaning firms will be poised to cut capacity unless inflows of new work start to pick up again.”
  • “The survey’s employment gauge is in fact already running at a level consistent with a further reduction in the official measure of factory payroll numbers.”
  • “Any uplift in prices was largely due to higher commodity prices, notably oil. Core price pressures look to have been once again subdued by weak demand.”

The manufacturing recession clearly shows no signs of improvement.

Mike “Mish” Shedlock

PMI Contracts For the First Time Since Oct 2013

The PMI dipped into contraction for the first time over 6 years in this morning's report from Markit.

Inflation-Adjusted Spending Declines Most Since September 2009: Stagflation Coming?

Today’s Personal Income and Outlays report shows consumer spending rose less than economists predicted and far less than inflation. The result is a big decline in real spending. Economists surveyed by Econoday missed the mark once again.

Another ISM/PMI Divergence: Non-Manufacturing

On April 3, I noted a huge discrepancy between the ISM manufacturing report and Markit’s PMI manufacturing report.

First-Quarter Real GDP 0.7%; Spending Slowest Since 2009: Nowcast Model Needs Serious Work

First quarter real GDP came in at 0.7% vs an Econoday consensus estimate of 1.1%. Consumer spending was the weakest since the 4th quarter of 2009.

Services PMI and Non-Manufacturing ISM Diverge Strongly Again

The soft data divergence between the ISM Non-Manufacturing Report on Business and the Markit Services PMI widened again today. Let’s take a look at each report.

US Manufacturing Recession Begins: ISM Contracts First Time in 3 Years

The manufacturing ISM dipped below the 50 mark signaling contraction. New orders, production, and employment are down.

ISM-Markit Manufacturing Divergence Widens Again

The divergence between the ISM Report on Business and the Markit PMI manufacturing index widened this month. ISM increased slightly from 54.8 to 54.9 while the Markit reading declined slightly to an 8-month low of 52.7 from 52.8

Slower Expansion in Non-Manufacturing ISM and Markit Services PMI

Business activity growth softened to a 7-month low in Dec. according to Markit. ISM expansion was less than expected.

Tale of Two Indexes: Non-Manufacturing ISM vs Markit PMI

The ISM Non-Manufacturing Index strengthened in October. Markit's Service PMI weakened.