Jan 3, 2020

Global manufacturing pauses its rebound

Poto: Jetta Productions Inc/Getty Images

After a modest recovery over the past four months, manufacturing reports produced by IHS Markit from around the world almost all worsened in December, showing that the sector continues to face global challenges.

The latest: The U.S. saw little change from November to December, remaining just above contraction with a reading of 50.1, but the eurozone looked tortured with both Italy and the Netherlands posting their worst PMI reports in 80 months.

  • The eurozone as a bloc recorded a PMI of 46.3, suggesting it's still in the midst of its manufacturing recession.
  • Of the more than 40 markets IHS Markit covers, only Russia and India saw improvements in their PMI reports.

What it means: "While we are not sounding any alarms, today’s data tells us that investors may have been a bit premature in pricing in a global economic recovery," Emily Roland, co-chief investment strategist at John Hancock Investment Management, tells Axios.

Go deeper: Midwestern manufacturing improved in December but is still contracting

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Dissecting the U.S. manufacturing divergence

Data: IHS Markit, ISM; Chart: Andrew Witherspoon/Axios

The IHS Markit and ISM manufacturing indexes diverged sharply again in December, with ISM's gauge showing the worst manufacturing report in a decade and Markit's showing a solid reading well above 50, which is the line separating expansion from contraction.

What's happening: One reason for this divergence, highlighted by IHS Markit's chief business economist Chris Williamson in a recent blog, may be that IHS explicitly tells respondents to "confine their reporting to US facilities/factories."

Go deeperArrowJan 6, 2020

Fed manufacturing indexes jump in January

Data: FactSet; Chart: Naema Ahmed/Axios

The Richmond Fed's January manufacturing survey recorded its highest reading in almost a year and a half on Tuesday.

Why it matters: The survey is considered a potential leading indicator of overall manufacturing because it is released close to month-end and may offer clues on national manufacturing readings like those from ISM and IHS Markit.

Go deeperArrowJan 29, 2020

U.S. manufacturing activity hits worst level since 2009

Photo: Scott Olson/Getty Images

The Institute of Supply Management's index of manufacturing activity released Friday hit its lowest level since the end of the Great Recession in December.

Why it matters: It shows worsening conditions for the U.S. manufacturing sector, which has been in contraction for five straight months, and reignites concerns about the trade war's impact on the economy. Stocks, already in the red after a U.S. airstrike killed a top Iranian general, fell near the lowest levels of the day following the release of the data.

Go deeperArrowJan 3, 2020