Estimated Local New Orders: New orders - New Export Orders = 0.5 - 1.5 = -1
Estimated Local Material: Inventories - Imports = (-1.9) - 0.7 = -2.6
The prices declined to 58 (-3.9) because of weaker local orders (Est'd -1). The new orders (49.4, +0.5) had increased marginally because of the rise in new export order (44.5, +1.5) after the US had become a global seller instead of a global buyer.
As the producers were not optimistic of the future economic outlook, they had reduced their production (48.2, -2.8) and inventories (45.8, -1.9) and caused the backlog of orders to increase (47.9, +1.7). The customers' inventories rose only marginally (43.9, +0.2) because of the weak local consumption.
The above factors caused the PMI to fall to 48.7 (-0.4) and this latest PMI corroborated with the weak US economic growth. The consecutive 8 months of contractions in the PMI don't bode well for the US economy. If the US continues to have a spike in its inflation, the US is very likely to encounter a STAGFLATION scenario that is very difficult to resolve.
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