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Economy still humming, but manufacturer optimism decelerates, flash PMI data show

Bloomberg News / Landov An employee customizes an aircraft-type titanium alloy plate prior to inspection at Rolls-Royce North America Inc.…

Bloomberg News / Landov

An employee customizes an aircraft-type titanium alloy plate prior to inspection at Rolls-Royce North America Inc. Crosspointe facility in Prince George, Va.

The figures: The flash IHS Markit US Manufacturing PMI slowed down to 55.4 in November from 55.7 in October. It was a three month low. Meanwhile, IHS Markit’s services reduced PMI to 54.4 from 54.8, the lowest within two months.

What happened: The US industry’s breakneck rate is increasing, as growth in new orders declined, according to an early reading in November, purchasing manager. Order books expanded at the slowest rate since December, said IHS Markit on Friday. And employment was expanded at the slowest rate for almost one and a half years. In addition, inflation picks up, which helps to dampen business confidence.

In a diffusion survey like this, reading shows over 50 signals improvement.

Read: GDP growth of 3.5% marks the best quarterly span in four years

Large picture: Economy has been buzzing when job growth continues, consumers feel more confident and companies like the adrenaline rate of tax cuts. But slower growth is ahead, and many analysts believe that the recent turmoil in global financial markets can lead to a decline. As activity, wages and prices are picking up, inflation can rise fast enough to be a headwind.

It is worth noting, as IHS Markit pointed out in his Friday edition, that the latest natural disasters &#821

1; and their recovery – can make economic data more wobbly this fall.

What do they say? “The surveys are broadly consistent with the growth of the economy at an annual 2.5% level,” said IHS Markit Chief Business Economist Chris Williamson.

“The November survey gives rise to some warning flags indicating that growth may slow down in the coming months. The growth in employment has especially decreased, as companies grew slightly less optimistic about the outlook. The exports of goods also seem to come under increased pressure, often linked to trade war with subdued demand. “

See also: Existing housing sales increase their first six month increase when housing market clouds remain

Market reaction: Dow Jones Industrial Average

DJIA, -0.51%

which has lost 1% during the year so far, fell sharply during Friday morning act as dampening oil prices weighing in larger markets. The glide of the oil is partly a response to geopolitical jockeying and partly a reflection of relief growth in China.

See also: Why falling oil prices are now a draw on the US economy

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