U.S. December S&P PMIs - Manufacturing corrects lower, Services very strong indeed
December’s preliminary S and P PMIs are mixed, with manufacturing correcting lower top 48.3 from 47.7 after two months of improvement but services at 58.5 from 56.1 very strong indeed and the highest since October 2021.
The manufacturing index shows a recent improvement failing to reach the neutral 50 level, contrasting the first six months of the year when the index held above neutral in each month. Tariffs could be an emerging concern given the dependence of US manufacturing on imported parts, particularly from Canada and Mexico.
The services index in contrast has seen a fresh leg higher after holding steady near 55 over the last seven months. Here tariffs are unlikely to be a concern and respondents may be focusing on the prospect of lower taxes and deregulation following the election. The index is however less well correlated with its ISM counterpart than the manufacturing survey.
