US growth remain strong, PMI edition

Today 2.45 pm GMT US Purchasing Managers' Index (PMI) data was released.

Fine lines are-

a)     Positive takeaways  -

• The latest manufacturing data shows healthier economy than expected. PMI reading 54.3 compared to 53.6 expected and 53.9 prior

• Expansion of production volumes, increase in output highest since October, 2014

• New orders increased, more than 5 years of continuous business expansion

• Manufacturers' cost burden reduces further.

b)    Negative takeaways -

• New hiring is slowing down

• Lack of demand coming from the energy sector that could deteriorate further

• Export growth is turning sluggish

Negative aspects are concerning but not unexpected given the rise of dollar and fall in oil price.

On a backdrop of stronger growth Dollar is expected to perform well.