US: Flash Markit Manufacturing PMI drops to 57.8 in December versus 58.5 expected

• Manufacturing PMI dropped to 57.8 in December from 58.3 in November. 
• "Barring the initial price slide seen at the start of the pandemic, December saw the steepest fall in factory input price inflation for nearly a decade."

According to IHS Markit's flash PMI survey, the US Manufacturing PMI Index dropped to 57.8 in December from 58.3 in November. That was below expectations for a small rise to 58.5. The Services PMI Index fell to 57.5 in December from 58.0 last month, below expectations for a rise to 58.5. As a result, the Composite PMI Index also fell on the month to 56.9 from 57.2 in November. 

Additional Takeaways from the survey

“The survey data paint a picture of an economy showing encouraging resilience to rising virus infection rates and worries over the Omicron variant. Business growth slipped only slightly during the month and held up especially well in the vulnerable service sector. Manufacturing output growth even picked up slightly amid a marked easing in the number of supply chain delays, which also helped to take pressure off raw material prices. Barring the initial price slide seen at the start of the pandemic, December saw the steepest fall in factory input price inflation for nearly a decade."

Market Reaction

Despite signs of easing supply chain problems and easings associated costs, FX markets did not react to the latest report.