The Purchasing Managers Index (PMI) Manufacturing reports have now been released for the month of September. At first glance, only 13 countries saw an improvement vs last month (compared to 17 the Aug / Jul comparison), and 19 worsened (unchanged at 19), with 4 unchanged. This now leaves 18 countries above the key level of 50, and 18 below.
Out of the G8, Canada’s improvement (49.1 to 51.0) now leaves 3 nations above 50 (US, Canada and France). Germany fared particularly badly, where the index fell to 41.7 from 43.5 in August, a new low since June 2009 and the ninth consecutive month of contraction. They also have the weakest absolute number from all the countries reporting. The New Orders reading also painted a grim picture, as it fell to 38.2 from 41.6 a month ago.
Separately, the US ISM Manufacturing report fell to 47.8 in September, also the weakest since June 2009, which was also well below expectations for a move back to 50. The employment component also failed to deliver and fell to the lowest point since January 2016; how much of the poor US ISM and recent Chicago PMI readings are due to the ongoing GM strike (now in its 3rd week) is yet to be seen.
Expectations for an October 30th cut in US Fed Funds rose to 61%, up from 40% earlier. This will no doubt ensure high importance for Friday’s NFP report, current expectations are for +147k / 3.7%. Separately, we have recently updated our macro chart pack; in it the global growth model continues to trend lower (in fact it’s the lowest since about 2013).