US Manufacturing Slumps (PMI) And Jumps (ISM) But Stagflation Scares Soar

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Following disappointing prints in European PMIs and contraction in Brazil, US Manufacturing PMI also slipped to the lowest since February with optimism at the lowest since January; BUT ISM exploded to its highest since Feb.

  • Manufacturing PMI dropped from 56.4 to 55.4 (4-month lows) but better than 54.6 expectation.

  • ISM Manufacturing spiked from 58.7 to 60.2 (4-month highs) above all economists’ expectations.

Under the hood, it’s stagflation red flags as the PMI showed output growth slowing, new order growth at the weakest since Nov 17, but factory gate prices spiked at the second-fastest pace since June 2011.

For ISM, prices paid dropped very modestly from multi-decade highs and new orders slipped.

ISM’s Fiore notes that Factories “are overwhelmingly concerned” about Trump tariffs.

Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The PMI for June rounds…

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