The U.S. Flash Manufacturing purchasing managers index (PMI) for September from Markit Economics is out today, and the reading of 51.1 is the lowest since September 2009. Any number above 50 indicates that the economy is expanding.
Economists had expected the flash reading to remain steady with August reading of 51.5. The Institute for Supply Management's manufacturing index is due later this morning, and the expectation calls for a reading of 49.7, up 0.1 from August's reading.
Among the various components of the flash reading, there are nuggets of good news. Employment is expanding more slowly, with a reading of 51.9 in September compared with 52.4 in August. Output prices are rising, which indicates manufacturers are able to charge more to pay the also rising input prices. Unfortunately, input prices continue to rise faster than output prices.
The new orders subindex reading rose from 51.9 to 52.3, the only bright spot in the September report.
Work backlogs have also fallen, from 51.4 in August to 48.4 in September, again the biggest drop in three years.
Markit's chief economist made this observation:
The PMI adds to the recent flow of disappointing news on the U.S. economy, suggesting that manufacturing is heading for a slide back into decline and dampening economic growth further in the third quarter.
Markit's report is available here.
Filed under: 24/7 Wall St. Wire, Economy, Research