Following China’s manufacturing PMI for December, the 10th month of contraction in a row, last night saw the US version – the ISM manufacturing print – also register a sudden fall.
When the worlds two biggest economies stop making stuff, you have to sit up and ask whats going on?
More from Bill McBride at Calculated Risk:
The ISM manufacturing index indicated contraction in December. The PMI was at 48.2% in December, down from 48.6% in November. The employment index was at 48.3%, down from 51.3% in November, and the new orders index was at 49.2%, up from 48.9%.
Repeating November’s slump, was the fact that 10 out of 18 manufacturing industries reported contraction in December. This included falls in “new orders, production, employment and raw materials inventories”.
A growing economy sure, but the higher USD and razor thin margins set to be pressured further at the Fed tightens might push the “growth” back into stagnation.