US PMIs – tracking the economy in pictures

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The ISM non-manufacturing and ISM manufacturing surveys were released on Wednesday and Monday respectively. The results are summarised below.

ism-tabel-snap2

What follows is a graphic overview of these numbers in the context of the US economy.

The GDP-weighted PMI for new orders is rolling over and indicates year-on­‑ year GDP growth of approximately 2.5% (2.7% quarter on quarter annualised).

uspmi-pic1

The Manufacturing PMI for production indicates that industrial production is currently 5% higher than a year ago.

uspmi-pic2

At approximately 74%, manufacturing capacity utilization is currently 5% higher than a year ago.

uspmi-pic3

The shedding of jobs has come to an end with the GDP-weighted PMI moving above 50 for the first time since end 2007. The unemployment rate is set to moderate further.

uspmi-pic4

The non-manufacturing sector is still cutting jobs but at a significantly reduced rate, while employment in the manufacturing sector has improved markedly.

uspmi-pic5

Non-farm payroll employment in February (announced later today) is likely to register a positive number.

uspmi-pic6

Business continues to reduce inventories, resulting in the level of inventories to sales falling to near historical lows.

uspmi-pic7

The continued reduction of inventories will impact negatively on GDP growth in the first quarter.

uspmi-pic8

But it will relieve upside pressure on the CPI somewhat.

uspmi-pic9

uspmi-pic10

However, high energy prices will continue to exert upward pressure on prices paid by industry.

uspmi-pic11

The GDP-weighted PMI for prices indicates that the CPI is approximately 3% higher than a year ago.

uspmi-pic12

uspmi-pic13

But, the CPI number could surprise on the upside and come in at 4% due to the strong oil price.

uspmi-pic14

uspmi-pic15

Note: All graphs used in this post were provided by Plexus Asset Management (based on data from I-Net Bridge and ISM).

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