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After dismal data from Europe, which followed earlier PMI numbers from Australia which pointed to a less steep decline, and a gauge for Japan which signaled a return to growth, the Composite US PMI was expected to decline modestly in preliminary December data.

Instead it rose modestly, from 50.7 to 51.0 (50.5 exp) thanks to a big improvement in Services (to 51.3 from 50.8) which outweighed further weakness in Manufacturing (down to 48.2 from 49.4)…

Source: Bloomberg

The early PMI data indicate that the US economy picked up a little momentum in December, closing off the year with the fastest growth recorded since July.

Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

Despite the December upturn, the survey therefore signals only weak GDP growth in the fourth quarter.

The survey’s selling price gauge, which tends to lead changes in consumer price inflation, remains sticky but at a level which is indicative of CPI running only modestly above 2%.

Is that really a picture that paints the need for six rate-cuts next year?