Surprise drop in ISM manufacturing PMI for December
US manufacturing sector activity slowed further last month amid weak order growth and soft demand across most sub-sectors, the results of a closely-followed survey revealed.
The Institute for Supply Management's factory sector Purchasing Managers' Index retreated from a reading of 48.1 for November to 47.2 in December (consensus: 49.0).
Key gauges linked to orders and employment both declined, with the sub-index tracking new orders slipping from 47.2 to 46.8 and that for employment falling from 46.6 to 45.1.
Survey responses across sectors were mostly downbeat, with one purchasing manager from the Transportation Equipment sector telling the ISM that they were: "cautiously optimistic is the rule these days. Sales are decent, but we're wondering what 2020 will bring.
"Still hedging that it will be successful — but maybe not as much as this year."
Cost pressures on the other hand rose, with the sub-index linked to the prices paid by firms increasing from 46.7 to 51.7.
For all the ISM indices, the 50.0 point level marked the threshhold between an expansion and a contraction.
"Overall, though, this is a seriously weak report, and we see little chance of a sustained near-term recovery. The Phase One trade deal leaves 25% tariffs on imported Chinese capital and intermediate goods in place, and we see little chance of a comprehensive trade deal to remove them before November’s election," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"The hard manufacturing data in recent months have been better than implied by the survey - stripping out the impact of the GM strike - but the sector appears still to be in a mild recession."