US factory sector activity cools a bit more in December, ISM says
Activity in the US manufacturing sector cooled a bit more but roughly as expected during the last month of 2022, the results of a closely-followed survey showed.
The Institute for Supply Management's factory sector Purchasing Managers' Index dipped from 49.0 for the month before to 48.4 in December (consensus: 48.5).
Comments from purchasing managers focused on weaker demand, staffing shortages and improved supply chain conditions.
Weakness among the various subindices meanwhile was concentrated in gauges for prices paid, which fell from 43.0 to 39.4, while a sub-index linked to production retreated from 51.5 to 48.5.
A sub-index for new orders also weakened, from 47.2 to 45.2, although that for employment improved from 48.4 to 51.4.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, labelled the details of Wednesday's report as "grim", highlighting how the production sub-index had plumbed its lowest level since May 2020 and that for new orders had recorded a fourth straight month beneath the 50 point barrier separating expansions from contractions.
He also noted the decline in the imports sub-index, which he said might portend a neutral reading on US foreign trade as far as calculating fourth quarter GDP growth was concerned, which might see growth of 4.0% or more, although he didn'ts expect that to last with GDP set to decline in the first quarter.
"China’s Caixin PMI, which usually leads the ISM by a few months, appears to point to a small uptick in the months ahead, but we are profoundly skeptical," he added.
"[...] The official index fell much more sharply in December, in a potentially ominous signal for the ISM."