U.S. manufacturing PMI index falls to 15-month low in December

The U.S. manufacturing sector growth saw a slower momentum in December; however, it is still a solid rebound in the sector’s health. The seasonally adjusted IHS Markit PMI index dropped to 53.8 in December from November’s 55.3. The latest headline figure implied a softer, but solid rebound in operating conditions throughout the goods producing sector. Although ending the year with a weaker overall growth, the final quarterly average of 2018 was solid and more rapid than that recorded in 2017.

Production growth continued to be strong in the month and at a pace that matched that was recorded in November. The growth in output was linked to greater new order volumes. However, the upturn was the joint-weakest in 15 months. After a slight rebound in November, new order growth moderated in December. Though solid, the rate of growth was the softest since September 2017. Even if some companies stated that the upturn was driven by new order inflows from newly acquired clients, others cited concerns about a fall in client demand compared to earlier in the year.

In spite of a moderate increase in backlogs in December, the pace of job creation eased to an 18-month low. Although firms noted an increase in workforce numbers following greater production requirements, others suggested that low rates of employee retention had weighed on growth.

In the meantime, rates of input price and output charge inflation eased in December. The pace of inflation fell to an 11-month low. Factory gate prices rose at the softest rate in 2018.

At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 37.6591. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex