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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

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Manufacturing Employment

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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