Markit's flash US manufacturing PMI eases more than expected

Activity in the US manufacturing sector eased more than expected in September, according to data released on Friday.

Markit’s flash US manufacturing purchasing managers’ index fell to 51.4 from 52 in August, missing expectations for a reading of 51.9. A reading above 50 indicates expansion.

This was the weakest improvement in overall business conditions since June, with softer rates of output and new business growth the main factors weighing on the headline PMI in September.

Survey respondents suggested that relatively subdued economic conditions had acted as a brake on new order volumes, while there were also reports that the strong dollar had dampened export sales.

Tim Moore, senior economist at IHS Markit, said: “September’s survey data points to a sustained upturn in manufacturing production, although growth remains subdued overall and only slightly faster than seen through the first half of 2016.

“However, manufacturers reported firmer job hiring than one month previously and input price inflation nudged upwards, meaning that the weaker headline PMI figure is unlikely to dampen expectations that the Fed will tighten policy at the end of the year.”

Paul Sirani, chief market analyst at Xtrade, said: “Today’s underwhelming manufacturing figures are unlikely to spark any additional enthusiasm for raising interest rates in December. Janet Yellen didn’t push the button this week, and if weak data like this continues to roll in then it might be 2017 before the next rate hike.

“Though this isn’t a major slowdown, the robustness of the world’s largest economy will come into question with policy makers and investors alike.”