Following this morning’s publication of the Eurozone’s PMI readings, Markit Economics has now published its PMI reading for June in the US. The US index came in at 52.5, lower than the flash estimate from earlier in June of 52.9. Any reading above 50 indicates an improvement from the previous month.
The US economy is improving, by the index reading, but the month-over-month improvement is the weakest in 18 months. The May reading was 54. Markit measures PMI on several metrics, including output, new orders, new export orders, employment, and others. The US readings for each category in June is showing either slowing expansion or contraction.
Output growth posted a reading of 53.4, the slowest growth rate since last October. New export orders continue to grow, but June posted the first decline in growth for the last eight months. Total new orders rose at the slowest pace for the last four months. New job creation continued in June, but the rate of growth was the lowest in 18 months.
Even though the US numbers are weak, they’re still stronger than Eurozone PMI, which posted an overall contraction in June:
Despite the weaker PMI reading in June, the U.S. continues to see a better manufacturing sector performance than almost all other economies around the world, thanks largely to resilient demand from the domestic market.
Recent consumer sentiment readings in the US don’t indicate a lot of resilience in US domestic demand. Markit, like nearly every other market observer, believes that the slow growth in the US economy and the low inflation rate will lead to further Federal Reserve stimulus in the second half of 2012.
Paul Ausick
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