All in the mid-to-low 50s and at 6-month lows, a significant moderation in growth is the signal from Markit Economics' U.S. diffusion indexes. The composite flash for March is 53.2 which is more than 1 point below the consensus. The manufacturing flash, at 53.4, is also about 1 point below expectations as is the services flash at 52.9.
Respondents are citing customer caution this month and are reporting slowing in employment, especially in the service sector where job creation is at a 3-year low. And in a negative for future hiring, backlog orders are starting to fall. Inventories at manufacturers, in another sign of slowing, are being cut back. Input prices are described as subdued.
The weakness in the manufacturing flash is notable, as it contrasts with extraordinary strength in regional factory reports and also the rival ISM where readings have been in the mid-to-high 50s. The weakness for this report, however, does correspond to mixed readings in hard economic data coming out of Washington.
If the economy does begin to slow, March would be the pivotal month and today's report will have proven its worth as an advance indicator.
Recent History Of This Indicator
In line with significant strength in the Empire State and Philly Fed reports, the PMI manufacturing flash for March is expected to move a solid 4 tenths higher, to a consensus 54.6 vs a final February reading of 54.2. The PMI services flash is also expected to rise but only incrementally, to 54.0 vs 53.8 in Final February. The PMI composite flash for March will also be posted with this release with the consensus at 54.3.