The United States Markit Manufacturing PMI Final was reported for December @ 55.1 from 53.9 in the previous period, beating expectations slightly. The latest index reading was the highest since March 2015. All-in-all a good sign for the improvement of the manufacturing sector.
The data from the survey indicates that U.S. manufacturing operating conditions improved into year end. This months rise in expectations were supported by output strength and more client demand expressed in an increase in new orders.
With production growth continues to show robustness employment rose at it’s fastest pace since September 2014. The additional rise in employment can be explained by the rise in backlog orders, which increased at it’s fastest pace since October 2015. The report noted that firms capacity pressures remain high.
More to the point, with the supply chain of the firms surveyed experiencing capacity pressures and more global demand for inputs, pushed costs higher in December. With the rate of cost inflation remaining sharp overall, however, charge inflation (wage-push inflation) softened.
Additionally, as we saw last week from the conference board print, Business confidence remained robust. IHS Markit’s report cited this sustained confidence from the businesses was driven for the most part by favorable demand conditions.