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US DATA: Composite PMI Surprisingly Strong As Serv/Mfg Divergence Builds

US DATA
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  • The S&P Global US PMI was notably stronger than expected in the flash December release, with the composite rising to 56.6 (cons 55.1) from 55.1.
  • It’s the highest for thirty-three months whilst the press release notes that “firms’ expectations output in the coming year also lifter higher, hitting a two-and-a-half year high”.
  • The latter is deemed to be "reflecting growing optimism about business conditions under the incoming Trump administration. Employment also edged higher, up for the first time in five months, as firms expanded workforce numbers amid the brighter outlook.”
  • It was driven by services jumping to 58.5 (cons 55.8) from 56.1. This index had been hovering around 55 since May before increasing to 56.1 in November. It also sees a resumption of a wider gap with the ISM Services measure which surprised lower back in November as it fell from 56.0 to 52.1 for its lowest since Aug.
  • It easily more than offset the surprise decline to 48.3 (cons 49.5) from 49.7 for the manufacturing index – the charts below show this increased divergence.
  • Mixed price implications: “Raw material cost growth spiked sharply higher in the manufacturing sector, though a further cooling of cost growth in the service sector helped to lessen overall inflationary pressures in terms of both overall costs and selling prices.”
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  • The S&P Global US PMI was notably stronger than expected in the flash December release, with the composite rising to 56.6 (cons 55.1) from 55.1.
  • It’s the highest for thirty-three months whilst the press release notes that “firms’ expectations output in the coming year also lifter higher, hitting a two-and-a-half year high”.
  • The latter is deemed to be "reflecting growing optimism about business conditions under the incoming Trump administration. Employment also edged higher, up for the first time in five months, as firms expanded workforce numbers amid the brighter outlook.”
  • It was driven by services jumping to 58.5 (cons 55.8) from 56.1. This index had been hovering around 55 since May before increasing to 56.1 in November. It also sees a resumption of a wider gap with the ISM Services measure which surprised lower back in November as it fell from 56.0 to 52.1 for its lowest since Aug.
  • It easily more than offset the surprise decline to 48.3 (cons 49.5) from 49.7 for the manufacturing index – the charts below show this increased divergence.
  • Mixed price implications: “Raw material cost growth spiked sharply higher in the manufacturing sector, though a further cooling of cost growth in the service sector helped to lessen overall inflationary pressures in terms of both overall costs and selling prices.”