Manufacturing Sample Shows Slow Growth

Growth in Markit's manufacturing sample is as slow as it's been since October 2013, at a composite 53.0 in August which is right at the Econoday consensus. Growth in new orders slowed while growth in backlog orders was marginal. Export orders, hurt by the strong dollar, contracted for the fourth time in five months with August's drop the deepest of the run. Growth in output is the slowest since January 2014 while growth in employment is the slowest since July 2014.

Inventory data are positive, showing the first decline this year for finished goods and the slowest build for pre-production in just over a year, a combination which may ease concern that inventories in the sector are heavy. Price readings are quiet.

This report, along with the ISM index which will be released later this morning at 10:00 a.m. ET, failed to pick up the auto-led rebound for the factory sector in June and July, a fact that will limit their impact on August expectations.

Recent History Of This Indicator:
The manufacturing PMI is expected to slow to 53.0 in August from 53.8 in July. This report never picked up the auto-related surge for the factory sector during June and July. Among components, exports have been weak in this report but employment strong.