Echoing the collapse in consumer sentiment, preliminary August data from Markit's business survey suggest peak optimism is long gone. Both US Services and Manufacturing PMI tumbled in August, beginning to catch down to 'hard' data's reality.
US Manufacturing PMI dropped from 63.4 to 61.2 (below the 62.0 exp)
US Services PMI dropped from 59.9 to 55.2 (well below the 59.2 exp)
Source: Bloomberg
This double-whammy sent the composite PMI for US down to its lowest since Dec 2020...
Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:
“The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales.
“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring. Jobs growth waned to the lowest since July of last year as companies either failed to find suitable staff or existing workers switched jobs.
“Prices charged for goods and services grew at an increased rate as demand once again ran ahead of supply, most notably in the manufacturing sector.
“Prices look set to continue to rise sharply due to the persistent upward pressure on costs arising from shortages of materials and labor, though if demand continues to cool due to rising case numbers this should alleviate some of the inflationary pressures.”
So is The Fed is going to taper into what is an economy whose wheels are clearly coming off? Judging by the markets surge on the latest miss, the answer is clearly no.
Courtesy of Tyler Durden, Founder of Zero Hedge
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