Markit Economics' U.S. manufacturing sample is reporting a loss of momentum. The final March composite is 53.3, vs 53.4 at mid-month and noticeably down from 54.2 in February and 55.0 in January. New orders, in part reflecting subdued export demand, slowed to a 5-month low in March and the sample is cutting inventories, two key signs of softness. Output also slowed in the month and so did hiring. But in a contrary sign of strength, input costs posted their highest showing in 2-1/2 years while pass through to selling prices kept pace, showing their best strength also in 2-1/2 years.
The slowing in this report is not confirmed by regional factory reports which showed mostly strength in March, but it does raise the possibility that the unusual strength in anecdotal reports may not translate to similar strength in government data. In another note, delivery times rose to a 2-year high due in part to the month's heavy weather, a reminder that weather is a wildcard for Friday's employment report.