At 54.3, the Markit Flash US manufacturing PMI (purchasing managers’ index),
which is based on approximately 85% of usual monthly survey replies, rose to an
eight-month high in November. This was up from a one-year low of 51.8 in
Meanwhile, the three-month average of the PMI, which gives an indication of the
underlying trend, was at 52.9, consistent with an ongoing modest improvement in
manufacturing business conditions.
After having increased only marginally in October, dampened by disruptions
arising from the government shutdown, manufacturing production rose at the
strongest pace for nine months during November. In the past three months, the
rate of output growth similarly picked up to a solid pace.
Chris Williamson, chief economist at Markit
said: “The flash PMI suggests
that the manufacturing
economy continues to expand at a reasonable but
unspectacular rate. The PMI bounced back from
the fall seen in October, linked to business
returning to normal after the uncertainty and
disruption caused by the government shutdown
(respondents are asked to compare the situation at
mid-month versus one month ago).
“The recent index readings are consistent with
manufacturing output growing 0.6% in the fourth
quarter (equivalent to an annualised rate of 2.3%).
However, even this pace of expansion is barely
generating any employment growth, with the survey
consistent with manufacturing payrolls rising by
only 1,000 in November.
“The resilience of the manufacturing economy in
the face of headwinds such as the shutdown and
fiscal wrangling will add to calls for policy to be
tapered. However, the recent drop in inflation to its
lowest since October 2009 suggests that the Fed
will be in no rush to tighten policy until the new
year, eager instead to see the pace of growth show
greater robustness and sustainability.”
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