- Chris Williamson, chief economist at Markit
The US flash data on activity in the manufacturing data showed a significant deterioration in January, as the corresponding PMI reading fell to the lowest level in twelve months. The preliminary manufacturing PMI dropped to 53.7 in January, compared with 53.9 in the preceding month. The rate of output growth rose slightly, whereas new business growth declined to the lowest level in a year, according to Markit. The flash estimate is based on around 85%-90% of total PMI survey responses each month.
Separately, sales of previously owned homes rose in December, a solid end to a weak year for the nation's housing market. Existing-home sales climbed 2.4% in December from a month earlier to a seasonally adjusted annual rate of 5.04 million, the National Association of Realtors said. Additionally, sales for November were revised downwards to 4.92 million from an earlier estimate of 4.93 million, and compared with the October's rate of 5.25 million. For all of 2014, existing home sales declined 3.1%, the first annual fall in four years. The housing market has struggled to keep momentum since stagnating in the second half of 2013 after a run-up in mortgage rates. However, mortgage rates decline, an easing of lending standards and an ongoing strengthening of the US economy over the last few months has boosted optimism that sales could improve this year.
© Dukascopy Bank SA