US manufacturers report that output fell during US shutdown

OUTPUT in the US manufacturing sector fell for the first time in over four years during this month, according to a survey released yesterday by data firm Markit.

The overall figure for the manufacturing purchasing managers’ index (PMI) fell to 51.1, indicating very marginal growth, the lowest level in a year. The output part of the index dropped into negative territory for the first time since September 2009.

Chris Williamson of Markit said: “The flash PMI provides the first insight into how business fared against the backdrop of the government shutdown in October, and suggests that the disruptions and uncertainty caused by the crisis hit companies hard.”

Capital Economics’ Paul Ashworth added concerns that the Fed may have “missed the window” to taper QE at all: “This really could turn into QEternity. With the potential costs of the asset purchases steadily rising, there may come a time when the Fed is forced to begin curbing its asset purchases against a backdrop of a still misfiring economy.”