Activity grew at its slowest pace in more than two years, according to the most recent Markit Flash U.S. Manufacturing PMI. The composite measure fell from 52.8 in November to 51.3 in December, its lowest level since October 2013. New orders (down from 53.1 to 50.5) and output (down from 54.8 to 52.7) each eased for the month, with sales expanding just barely. On the other hand, exports (up from 49.4 to 50.5) returned to positive territory after contracting in the prior month, and hiring (up from 52.7 to 53.0) picked up modestly. Stronger labor market data possibly provide some reassurance for a sector that has seen virtually no job gains since January.
Meanwhile, the news was even more encouraging in Europe. The Markit Flash Eurozone Manufacturing PMI edged up from 52.8 to 53.1, its highest point since April 2014. More importantly, new orders (up from 53.4 to 54.0), output (up from 53.9 to 54.4) and exports (up from 52.8 to 53.0) each continuing moving in the right direction, notching up decent expansions in key indicators. Employment (down from 51.9 to 51.8) slowed a bit, but the underlying trend on the jobs front reflects a positive trend over the longer term. These data reflect slightly accelerated activity in Germany (up from 52.9 to 53.0), its highest level since August, and France (up from 51.0 to 51.4).