Courtesy of Mish.
A trio of good manufacturing reports came out today: The Philly Fed, Empire State, and PMI Flash. The latter shows record stockpiling.
The Markit Flash U.S. Manufacturing PMI™ shows survey-record stock building.
Key Findings
- Manufacturing PMI hits 21-month high during December
- Stocks of inputs accumulated at the fastest pace since the survey began in May 2007
- Robust rises in output, new orders and jobs
U.S. manufacturers reported a strong end to 2016, with business conditions improving at the fastest pace since March 2015. At 54.2 in December, up fractionally from 54.1 in November, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) continued its recovery from the post-crisis low seen in May (50.7).
Chris Williamson, Markit Chief Business Economist Comments
- “US manufacturing is enjoying a strong end to 2016, showing further signs of pulling out of the soft-patch seen earlier in the year and putting the sector on the starting blocks ready for a further upturn as we move into 2017. “The fourth quarter has seen the strongest PMI readings for one-and-a-half years, suggesting the goods-producing sector is growing at an annualised rate of 2-2.5%.”
- “A buoyant domestic market, reflecting a combination of rising consumer demand and inventory building, is helping offset export woes caused by the strong dollar.”
- “Companies are gearing up for further growth in coming months: employment is rising at the fastest rate for 18 months and purchasing activity has likewise been ramped up in preparation for higher production. Confidence among producers has clearly improved, setting the scene for a good start to 2017.”
- “The upturn is being accompanied by rising costs, linked mainly to global commodity prices lifting higher. The combination of solid growth and rising price pressures adds to the likelihood of further Fed action in 2017, with three more quarter point hikes anticipated next year by IHS Markit.”
Belief in three hikes next year is near-universal.
Empire State Optimism Soars
The Federal Reserve Bank of New York Empire State Manufacturing Survey shows look-ahead optimism approaching 5-year high.
