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US PMIs Surge In November But “Business Conditions Remain Subdued”

Courtesy of ZeroHedge View original post here.

After a mixed picture in Germany this morning, which followed the mixed picture in US PMIs in October, analysts expected a small bounce in today's flash November PMIs but both Services and Manufacturing data surged.

  • Markit Services PMI 51.6 vs 50.6 prior (51.0 exp)

  • Markit Manufacturing PMI 52.2 vs 51.3 prior (51.4 exp)

Both PMIs rising despite hard data declining rapidly after the end of the fiscal year…

Source: Bloomberg

Standouts from the surveys include the following.

Services PMI:

  • Prices charged rises to 50.6 vs 50.1 in Oct. – Highest reading since June 2019

  • Employment rises vs prior month – Highest reading since Aug. 2019

Mfg PMI:

  • Employment rises to 52.3 vs 51.3 in Oct. – Highest reading since March 2019; Fourth consecutive month of expansion

  • New orders rise vs prior month – Highest reading since April 2019

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:

A welcome upturn in the headline index from the flash PMI adds to evidence that the worst of the economy’s recent soft patch may be behind us. Output of the combined manufacturing and service sectors rose in November at the fastest rate since July, spurred by improved inflows of new business. Encouragingly, firms took on staff again after two months of headcount reductions, primarily to help deal with rising backlogs of work.

“A recovery of manufacturing production growth to a ten-month high is especially welcome news, helping to lift service sector activity growth from recent lows.

“However, although improving, the picture of current business conditions remains subdued by standards seen over the past decade and the business mood sombre in relation to prospects for the year ahead. The latest survey results are indicative of GDP rising at a modest annualised rate of just 1.5%, with payrolls rising at a monthly clip of approximately 100,000.

Although up on lows seen in the summer, business expectations for the future are still well below levels seen earlier in the year, reflecting heightened anxiety regarding trade wars and geopolitical uncertainty, as well as recent low customer enquiry numbers and the weakness of new sales volumes.”

We also note that after Japan and Germany showed modest rebounds on their Composite PMIs, US data surged to their highest since July…

Source: Bloomberg

Meanwhile, US leading economic indicators are in their worst slump in over three years…

Source: Bloomberg

And finally, if you think you should  buy stocks on this rebound, forget it – it's already more than priced in…


 


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