Growth in America’s manufacturing sector has unexpectedly fallen to a two-year low this month.
Markit’s US flash PMI index
has dropped to 52.6 in November, a hefty fall compared to October’s 54.1.
It’s the weakest reading since October 2013 (but still over the 50-point mark separating expansion from contraction).
This means U.S. firms reported that output and new orders has slowed this month, meaning they took on new staff at a slower rate.
Worryingly, export sales fell.
"November's flash PMI survey indicates that the manufacturing sector lost some growth momentum after the nice pick up seen in October," said Chris Williamson, chief economist at Markit. All five of the index's components declined.
"Domestic demand appears to be holding up well, but the sluggish global economy and strong dollar continue to act as dampeners on firms’ order book growth. Export orders showed a renewed decline, dropping for the first time in three months," he said.
But the sector is still growing, meaning the Federal Reserve could still raise interest rates next month.
The November release "shows broad softness across US manufacturing activity and brings the Markit series closer in line with the ISM manufacturing index, which has indicated stagnant conditions for the past several months," according to Barclays economists in a client note, Business Insider
"With the trade-weighted dollar at the highest levels in over a decade, the headwinds facing US manufacturing have yet to subside."
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