|Level||54.2||54.1 to 55.0||52.9||53.8|
Monthly growth in Markit's manufacturing PMI sample is at its slowest since October 2013, at a much lower-than-expected 52.9 in the flash for August. A slowing in production growth pulled the index down as did moderation in what is still described, however, as solid growth in new orders. But export sales remain subdued and capital spending in the energy sector remains weak. Growth in hiring is the weakest since July last year.
This report follows mixed signals from yesterday's Philly Fed, which was solid, and Monday's Empire State which was a disaster. Today's report is also mixed with broadly weak indications offset by the continued strength in domestic orders. Next indications on August factory conditions will be Tuesday with the Richmond Fed.
Market Consensus Before Announcement
The manufacturing PMI is expected to signal slight acceleration in August, to 54.2 from July's 53.8. The July report noted that manufacturers are focusing their efforts more on the domestic market and less on exports, the result of weak foreign demand together with the effects of the strong dollar.
Purchasing Managers' Manufacturing Index (PMIs) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors. The flash index, usually released about a week before the final, gives a preliminary reading of conditions for the current month.
Purchasing Managers' Manufacturing Index (PMIs) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy. The flash index, usually released about a week before the final, gives a preliminary reading of conditions for the current month.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the Markit PMIs in the U.S. and elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.
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