Compared to other manufacturing surveys, the Purchasing Managers Index (PMI) has been consistently running warmer, which helps to put into context the disappointment of December's number. The current reading came in at 51.2, below the previous number of 52.8 in November.
The final reading for December is just barely lower than the mid-month flash.
Near stagnation in new orders is a key negative in the report, one that points to further slowing for the headline index in coming readings.
Orders are still growing, but at their slowest pace of the recovery, since September 2009. Backlog orders are contracting sharply, the most since September 2009 as well. The report points to widespread weakness across orders, including for export orders, where manufacturers continue to cite strength in the dollar as a negative.
Looking at the other readings, production is flat, pre-production inventories are down, while hiring is still strong at the moment. Price data show continued contraction for inputs, the result of low oil and commodity prices, but a third month of gains for finished prices, which is one of the few pluses in this report.
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