-Markit
Activity in the US manufacturing sector unexpectedly declined in April, showing it's weakest upturn since September 2009. Markit said that its flash manufacturing PMI for April fell to 50.8, the lowest level since September 2009, from the previous month's final reading of 51.5, missing expectations for a gain to 52.0. Softer output and new business growth along with a weaker increase in employment were the main factors weighing on the index. The US manufacturing sector had been undermined by the strong Dollar, sluggish global growth and excess supply.
The data extend a streak of increasingly disappointing fundamentals that have prompted Wall Street analysts to sharply lower their expectations for GDP growth early this year. Few expect the economy to grow even as little as 1% after an already disappointing end to 2015. Fed policy makers are expected to keep interest rates steady when they meet this week, but may tweak their description of the economic outlook to reflect more benign conditions, leaving the door open for future rate rises. Though the economy is creating jobs and consumer prices have climbed, providing support for a Fed interest rate hike, weakness in retail sales and international trade, as well as concern about China's economy, are among reasons Fed Chair Janet Yellen will remain cautious about further rate hikes before the second half of the year.
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