US Manufacturing PMI Hits Three-Month Low, ISM Factory Index Falls

by on February 3, 2014 3:47 pm BST

The US manufacturing PMI retreated from an 11-month high in December’s reading of 55 to 53.7 in January. Manufacturers reported that output and new business growth declined in January with abnormally cold weather, once again, being the scapegoat. New Export orders dropped for the first time since September. The weaker new business growth was offset by increasing input buying.

The Institute for Supply Management (ISM) factory index declined from 56.5 in December to 51.3 in January, slumping closer to the pivotal 50 level that divides growth and contraction. Analysts were expected 56.2,yet the factory index averaged 53.9 throughout 2013.

The euro zone reported manufacturing PMI data as Spain continues to improve, expanding to 52.2 from 50.8. The Italian PMI data fell short of expectations of 54.2, coming in at 53.1. The United Kingdom’s PMI data was strong with 56.7 but was short of the 57.2 seen in December.

US construction projects modestly rose .1 percent in December, an annual rate of $930.5 billion, according to the Commerce Department. This fell short of economist forecasts of a .4 percent increase.

The US equities indices are lower on the day, with the S&P 500 down 17.8 points, the DOW down 146.49 points, and the NASDAQ falling 49.58 points. The US dollar is down .2 percent, while the safe-haven yen has seen an upward move of over one percent.

Currencies generally associated with risk – Australian dollar, euro, and the Canadian dollar – are higher on the day.