China (Excerpt)

The National Bureau of Statistics of China conducts the official surveys of purchasing managers. The agency’s manufacturing index for January was based on a pool of 3,000 respondents, more than triple the previous number. It also plans to expand the sample size for its services survey to about 8,000 companies from 1,200. China’s official M-PMI edged down from 50.6 in December to 50.4 last month. The official NM-PMI edged up from 56.1 to 56.2.

China’s manufacturing sector is showing signs of slowing as the country’s rising labor costs reduce the competitiveness of its export sector, which has been a major employer. Indeed, there is a good correlation between the M-PMI’s Export Orders Index and the Employment Index. Both have been mostly under 50 since mid-2011.

Today's Morning Briefing: Purchasing Managers: Our BFFs. (1) Insightful friends. (2) Been around for a while. (3) Are they seeing an upturn in the US and global economies? (4) PMIs are useful leading indicators for S&P 500 revenues and earnings. (5) US may be leading global upturn. (6) Services strong in Germany and China. (7) Export orders and employment weak in China's manufacturing sector. (More for subscribers.)