PMI: Purchasing Managers Data Continues to Weaken

The Markit Economics’ PMI for the U.S. slowed again to 51.8 in July from 52.5 in June. The Bloomberg consensus target was 52.6 for July, although we question how the estimates could have been hoping for the report to be that close to the prior month’s data. Yet again, the report showed the weakest rate of growth in over 18 months. In all honesty, how can these economists expect any improvement or even stabilization based upon the current flow of economic data trends followed by a continued weakness in company guidance and international news of late?

The PMI is often overlooked, but it can be a critical tool for evaluating the overall business conditions and the trends of the coming months. As Bloomberg notes,

Purchasing Managers’ Manufacturing Index (PMIs) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors. The flash index, usually released about a week before the final, gives a preliminary reading of conditions for the current month.

JON C. OGG