Bold PMI data, unexpected "happy and sad"
I was late for home today because of something, which resulted in the failure to synchronize my views in time when the PMI data was updated. However, compared with my expected data on Sunday, the PMI index on Monday today really amazed me.
The original expectation was that the data would be neutral, continue to maintain the strong "data" of the US economy, and not bring too much pressure to inflation. As a result, the two PMIs gave completely opposite statements.
First, the final value of the S&P Global Manufacturing PMI in May in the United States. Personal expectations were lower than expectations and the previous value, and the greatest possibility was that it was in line with expectations. Unexpectedly, the data was directly given to exceed expectations and the previous value, and the data of 51.3 was released. The single data proved that the US manufacturing industry continued to perform strongly. This will bring pressure to inflation and is not conducive to the expectation of interest rate cuts.
The second data is the US ISM Manufacturing PMI in May. The data is from the US Supply Management Association. Compared with the S&P Global Manufacturing PMI index, the weight is higher. After all, one is from the Supply Management Association and the other is from the S&P Global Intelligence Organization, and the former has a higher data weight.
Originally, personal expectations were lower than expectations and higher than the previous value, proving that the manufacturing industry is recovering, and at the same time, it does not bring too much pressure to inflation in the short term.
The final result exceeded my expectations, lower than the previous value and expectations, and the published value was 48.7. The data remained below the 50 line of prosperity and decline, proving that the US manufacturing industry is still in a recession and is getting further and further away from the 50 line of prosperity and decline. This is a result I did not expect. Although the continued decline of the manufacturing industry represents the decline of the US economy, from another perspective, it represents the reduction of inflationary pressure and the increase of expectations for interest rate cuts, which is a kind of "eating happy funerals".
Note:
The inflation brought about by the recovery of the manufacturing industry is actually benign inflation, and the decline of the manufacturing industry does not directly mean that the inflationary pressure has been greatly reduced. After all, 70% of the US GDP still comes from the service industry. Although the manufacturing industry is an important industry in the United States, in recent decades, the United States has transferred many low-cost labor markets overseas, resulting in the country not completely relying on the manufacturing industry to promote the economy, and everyone has seen the consequences of this. However, this also avoids excessive inflationary pressure brought by the manufacturing industry (although the recovery of the US manufacturing industry is a bit far away)
PS: The "eating happy funerals" in the article comes from the "funeral celebration" mentioned by Teacher Ni recently
