Much lower than expected from the service that tends to run much higher than the others.
Fed rate hike already working! 😉
PMI Services Flash
The services PMI is slowing sharply this month, to 53.7 vs 56.1 for the final November reading and vs 56.5 for the flash reading. This is the lowest reading in a year reflecting the slowest growth in new orders since January and a fifth straight month of contraction in backlog orders. Optimism over future growth is understandably down, reflecting what the report says is a subdued global outlook, election uncertainty and softer demand in the energy sector. Price readings remain subdued with inputs at their weakest pace since February. Despite weakness in orders and the downcast outlook, hiring is described as “resilient”. Given weakness in global demand, the service economy is the nation’s bread and butter and today’s report, though only one data point, hints at slowing for the economy.
Bad! Fed rate hike already working here too! 😉
United States : Kansas City Fed Manufacturing Index
Kansas City’s emergence above water didn’t last long, only one month in fact. The December index came in at minus 8 for the eighth contraction in nine months with only November’s modest plus 1 reading the exception. Production is in contraction as are both new orders and backlog orders with employment in severe contraction at minus 17. Price data are also in contraction. With oil prices continuing to move lower, the worst may not yet be over for the Kansas City economy.
From Calculated Risk:
According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity declined moderately, although expectations for future activity remained solid.
“After two months of mostly steady activity, regional factories pulled back again in December,” said Wilkerson. “The weakest activity was in energy-concentrated states.”
Tenth District manufacturing activity declined moderately in December, reversing gains from the last several months, while producers’ expectations for future activity remained solid. Most price indexes continued to ease further.
The month-over-month composite index was -9 in December, down from 1 in November and -1 in October
The employment index dropped from -8 to -14, and the capital expenditures index posted its lowest level since August 2010. …
Future factory indexes were mixed, but remained at generally solid levels. The future composite index was basically unchanged at 7, while the future production, shipments, and new orders for exports indexes increased modestly.