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US Manufacturing PMI unexpectedly falls to 9-year low with trade war and slowing global economy clouding outlook

Jun 21, 2019

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  • The IHS Markit manufacturing Purchasing Managers’ Index fell to 50.1, worse than expectations, which were for it to remain steady at 50.5
  • Today’s reading is a 9-year low for the manufacturing PMI
  • It is another sign of a slowing economy, being weighed down by the trade war and a slowing global economy
  • The reading aligns with the Fed’s assessment of an economy with increasing uncertainties
  • HIS Markit had the following comment: “Recent months have seen a manufacturing-led downturn increasingly infect the service sector”

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  • In the same report today, the services PMI gauge also fell more than expected to 50.7
  • IHS said wage gains were the lowest seen in 2 years, adding, “Anecdotal evidence suggested that heightened economic uncertainty has acted as a brake on staff hiring”
  • When manufacturers were asked about the most recent month, two-thirds said their increased costs were the result of tariffs
  • Today’s reading adds ammunition to the calls for the Federal Reserve to cut interest rates sooner than later

 

 

 

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IHS Markit Manufacturing Purchasing Managers’ Index

manufacturing PMI

Source: Bloomberg

 

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