MORE SOFTNESS IN THE U.S. ECONOMY …
Based on new orders, inventory levels, production, supplier deliveries and “employment environment,” a PMI reading above fifty is considered to be reflective of an expanding economy. This month’s reading clocked in at 56.2 – well below September’s 57.5 reading (and well below analysts expectation of a half-point decline).
“Softer new business growth,” was the main culprit, according to the report, “as the latest rise in new orders was much weaker than in September and the slowest for nine months.”
“The latest increase in production volumes was the weakest since March,” the report added. “Moreover, the rate of output growth has now moderated for two months in a row, which represents the first back-to-back slowdown since May 2013.”
Ruh-roh … and according to Markit this two-month backslide could “translate into a further slowdown in the coming months.”
Following an unexpected retail slump last week, we’re now looking at additional evidence of a softening economy – one in which a record 92.6 million working age citizens are already not participating.
Stocks were soaring mid-day Thursday despite the bad news … up nearly 250 points on the result of positive earnings reports. Of course the market has taken a beating over the last few weeks, so these gains aren’t exactly worth getting excited about.
Guess that means it’s time for the government’s central planners to roll out more “stimulus.”