Whom are you going to believe?
The two diffusion indices for US manufacturing, Markit and NAPM, continue to diverge this year
Markit’s verdict for the US manufacturing sector is gloomy: “The latest US PMI survey showed a renewed stuttering of the manufacturing economy during August. The headline seasonally adjusted PMI fell from 53.3 in July to 52.8, the latest reading dropping below the average seen in the year-to-date and registering one of the weakest improvements in the overall health of the sector seen over the past year.”
But NAPM’s older (and presumably broader) survey showed the best reading since 2011. The market went with NAPM and ignored Markit, and the price of the 30-year Treasury bond fell by a point. The 36,000 manufacturing jobs reportedly added in August seem to validate the NAPM reading. Still, the discrepancy is strange and bears watching. We have been unable to find an explanation for the divergence from any of the usual suspects.