IHS Markit reported on Monday the seasonally adjusted IHS Markit final
U.S. Manufacturing Purchasing Managers’ Index (PMI) came in at 57.7 in December,
down from 58.3 in November and marginally below the earlier released “flash”
estimate of 57.8. The latest reading pointed to the slowest growth in U.S. factory
activity since December 2020.
Economists had forecast the index to remain unrevised at 57.8.
According to the report, the December drop in the headline figure reflected a slower
growth of new orders, which expanded at the softest rate for a year, mainly reflecting
reluctance at customers to place orders before inventories were worked through.
In addition, manufacturing production growth remained subdued, amid persistent material
shortages and supplier delays. Meanwhile, longer lead times for inputs led
to another jump in backlogs of work, albeit the weakest for ten months. On the
price front, the pace of cost inflation decelerated to the softest for six
months but remained among the fastest on record. Given a slightly easier increase
in cost burdens, output charges were raised at the slowest rate for eight
months.