Final numbers are in for May's Markit U.S. Manufacturing Purchasing Managers' Index (PMI), and the message is mixed. According to a Markit report (link opens in PDF) released today, May's index bumped up 0.4% month-over-month to 52.3.
The "flash" index, a rough early estimate, had put May's numbers at 51.9. Analysts had expected today's report to mimic's April's 52.1 reading, which was a six-month low.
Although an above-50 reading denotes expansion, the report notes that the index is "consistent with only a modest state of growth."
A closer examination of the index's components reveals that, although new orders expanded at a faster rate (53.3 from April's 51.5) and output prices bumped up 0.8 points to 51.9, there are warning signs of a slowing economy. The rate of output growth hit a seven-month low, while manufacturing employment rose the least since last November.
Looking ahead, Markit Chief Economist Chris Williamson noted:
There is a possibility that growth may pick up again. The deteriorating export performance is being offset by rising demand in the domestic market, and large firms are reporting the strongest growth of new orders for just over a year. However, the short-term outlook is one of subdued growth at best, suggesting the recent slowdown in the manufacturing economy will add to the likelihood of GDP growth weakening in the second quarter.