The S&P Global China manufacturing PMI survey's headline index rose slightly from 50.7 in November to a four-month high of 50.8 in December. This survey has shown modest growth in the sector in three of the last four months. Official PMI survey data published over the weekend, however, showed further contraction in the sector in December, suggesting that China's economy remains impacted by weakness in the property market.

Respondents to the S&P PMI survey reported slightly stronger output and new orders in December and a somewhat smaller decline in new export orders. Payrolls, however, were reported to have been cut for the fourth consecutive month and at a more pronounced rate, while the survey's measure of business confidence fell from its November level. Price pressures were reported to have moderated in December with the survey showing input costs rose at a slower pace and only a modest increase in selling prices.

Today's data was above the consensus forecast of 50.3 for the headline index. The China RPI and RPI-P were unchanged at minus 21 and minus 20 respectively, indicating that recent Chinese data in sum are coming in below consensus forecasts.

After rising more than a point in November to 50.7, which was nearly a point-and-a-half higher than expected, S&P's manufacturing PMI in December is expected to fade back to 50.3.

The S&P Manufacturing Purchasing Managers' Index (PMI) is based on monthly a questionnaire that surveys of over 500 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.

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 purchasing managers' manufacturing indexes, 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 S&P 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.