Is US Flash Manufacturing PMI Indicating a Softer Business Environment?
US flash manufacturing PMI in August
The US August flash manufacturing PMI stood at 52.5 as compared to 53.3 in July. The August reading didn’t meet the market expectations of 53.3.
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The fall in US flash manufacturing PMI in August was mainly due to the following reasons:
- Production volume rose at a weaker pace in August 2017.
- New order growth rose at a slower rate in August 2017.
- The employment in the services sector rose at a slower rate in August 2017.
The flash manufacturing PMI is indicating a softer business climate for the US manufacturing sector (QQQ) (SPY). However, in the above part, we saw that the US (IWM) (VFINX) service industry showed strong improvement in August 2017. The international demand in the manufacturing industry remained weaker in August 2017.
The manufacturing PMI showed its strongest improvement in January 2017. It rose to 55 in that month. Since January 2017, it has shown a gradual fall in performance, which indicates that both the domestic demand and consumer confidence has weakened.
Performance of various ETFs
The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500 Index, has fallen nearly 0.77% so far in August 2017. The PowerShares QQQ Trust, Series 1 (QQQ), which tracks the performance of the major technology stocks in the United States, has fallen nearly 0.2% so far in August 2017.
In the next part of this series, we’ll analyze the performance of France’s flash manufacturing PMI in August 2017.