Strong hiring but weak production is the factory story in this morning's employment report and is repeated in PMI manufacturing data where the final composite for August came in at 52.8, up 3 tenths from the mid-month flash but down 5 tenths from July for the weakest reading since June last year
The PMI's sample reported the strongest hiring in six months and also gains for new orders that reflected domestic demand, not export orders which were flat. The first rise in backlogs since April helped spur the hiring. But the month's production, like the headline, was the weakest since June last year. Good news, however, comes from selling prices which improved as the sample passed through higher input costs for steel and electrical components.
A slowing in inventory build rounds out what, despite the strength in hiring, is a mostly soft report. ISM manufacturing follows this morning at 10:00 a.m. ET which is a report that has been running much hotter than this one.