The ISM Manufacturing PMI in the US dropped to 58.7 in December from 61.1 in November, below analysts’ expectations of 60.2. The reading pointed to the weakest growth in factory activity since January 2021, amid a slowdown in new orders (60.4 vs 61.5) while employment grew the most since April (54.2 vs 53.3) and prices paid eased the most since March 2020 (68.2, the lowest reading since November 2020, vs 82.4). The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement. "All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products. Coronavirus pandemic-related global issues continue to limit manufacturing growth potential. However, panel sentiment remains strongly optimistic", Timothy Fiore, Chair of the ISM said.
The manufacturing sector in the United States recorded a slowdown in December. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appToday's report showed that factories hired more workers. A measure of manufacturing employment jumped to an 8-month high. Taking into account the declining number of initial jobless claims and aforementioned reading, one can assume that job growth accelerated in December. Therefore Friday's NFP reading may surprise positively. According to a preliminary Reuters survey of economists, nonfarm payrolls likely increased by 400,000 jobs in December after rising 210,000 in November.
