The Markit U.S. Manufacturing Purchasing Managers' Index (PMI) eased down 2.4% to 53.7 for January, according to a Markit report (link opens a PDF) released today. That's the lowest reading since October and down from an 11-month high of 55.0 in December.
An above-50 reading denotes positive change from the previous month, putting this month's report in growth territory once again, despite smaller gains. Analysts had expected a slight slowing, however, and their 53.9 estimate was essentially spot-on.
This month's flash index estimate clocked in at 53.7 two weeks ago, when Markit analysts pointed to wintry weather as part of the reason for the index's decline. The "flash" estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.
On a component-by-component basis, things certainly aren't as sunny as December's 11-month high. The all-important new orders component fell 4 points to 53.5, while export orders slipped into contraction with a 3-point drop to 48.4. Backlogs of work also shrank, down 3.6 points to 49.2. As a sign of some longer-term stability, the employment component remained solid, dipping just 0.8 points to 53.2.
Chief economist Chris Williamson was quoted as saying:
Survey respondents reported the weakest growth of output and new orders for three months in January, but with many companies blaming exceptionally cold weather for production and supply chain disruptions, the underlying trend looks to have remained robust. The ongoing expansion suggests that the goods producing sector is on course to contribute to another quarter of solid economic growth in the first quarter, and is also helping sustain a decent rate of job creation. The survey is broadly consistent with 10,000 jobs being created per month in the manufacturing sector which, added to the signal from the flash services PMI, points to non-farm payroll growth in the region of 200,000 in January. The improvement supports the view that the economy is withstanding the ongoing tapering by the Fed. However, it will be important to see the indices bounce back from January's weather-related weakness to be sure of this resilience.