: US manufacturing PMI

Bottom line:  Worrying headline and composition, giving cause for the Fed to cut rates on September 18 … in spite of a torridly positive summer for the US consumer.


  • The US manufacturing PMI slipped to 49.1 in August, first time below 50 for three years.
  • The employment component fell to 47.4 and, along with some other indicators, is suggesting a weak payrolls report this Friday. The fall in export orders and the rising negative gap between new orders and inventories were the most worrying elements of the report.
  • Meanwhile Markit’s differently measured global manufacturing PMI actually improved modestly in August (from 49.3 to 49.5) with China’s Caixin going above 50, and both Korea and the Euro Area less negative.
  • Manufacturing is still only 10% of the economy.  Non-manufacturing/ service PMIs are due later this week – they have held up better so far.