WTF Is Going On With US Manufacturing PMI Data…

After yesterday’s ugly data, S&P Global’s US Manufacturing PMI offered a ray of ‘soft’ hope with an acceleration intra-month – from 50.7 in January to 51.5 preliminary in February to 52.2 final today.

BUT…

In the face of S&P Global’s gains, ISM’s Manufacturing survey puked from 49.1 to 47.8 (well below the expected jump to 49.5)

Source: Bloomberg

This is the biggest divergence between the two Manufacturing surveys in at least three years (Bloomberg data only back to 2021 on S&P Global).

S&P Global says total US manufacturing new orders grew at a strong pace that was the fastest for 21 months… but ISM say it contracted...

S&P Global and ISM agree that selling prices increased at the steepest pace since April 2023.

S&P Global saw employment pick up with the quickest rate of job creation since last September, while ISM saw employment contracting at its worst since June 2020…

Source: Bloomberg

Oh, and Aluminum prices are up… and down!!!

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“Manufacturing is showing encouraging signs of pulling out of the malaise that has dogged the goods-producing sector over much of the past two years. After a long spell of reducing inventories in order to cut costs, factories are now increasingly rebuilding warehouse stock levels, driving up demand for inputs and pushing production higher at a pace not seen since early 2022. There are also signs of stronger demand for consumer goods, linked in part to signs of the cost of living crisis easing.

“Firms are consequently investing in more staff and more equipment, laying the foundations of further production gains in the coming months to hopefully drive a stronger and more sustainable recovery of the manufacturing economy.

“Problems with shipping disruptions and supply chains earlier in the year have eased, taking some pressure off input prices, though factory gate prices are recovering amid stronger customer demand, which will be an area to watch closely in the coming months as policymakers assess the appropriateness and timing of any interest rate cuts.”

So… S&P Global sees Manufacturing expanding at its strongest since June 2022… and ISM sees it contracting for the last 15 months.