Manufacturing And Service Samples Reports Show Slowing

Both the PMI manufacturing and services samples reported slowing growth in November, pulling down the PMI composite slightly to 54.4 for the flash November reading.

The manufacturing flash eased to 55.4 which is still a very solid level supported by accelerating growth for new orders, which are at a 6-month high, and employment which is at an 11-month high. Production is moderating this month as is inventory growth. The manufacturing sample continues to cite capacity constraints including stretched supply chains as the main headwinds to growth. Cost pressures for raw materials including metals, the latter tied in part to tariffs, remain elevated.

The services PMI also eased slightly held down by noticeable moderation in new orders and also employment where growth so far this month is the slowest since June last year. Cost pressures for this sample are moderating.

The weakness in the employment reading on the services side is offset in part by strength in employment on the manufacturing side, yet it nevertheless does fall in line with the rise seen in this month's unemployment claims. Otherwise the results keep in place an outlook for solid fourth-quarter growth.