Following Europe's surging PMIs (to six-year highs), US data was extremely disappointing. Both Services and Manufacturing PMI disappointed, tumbling to the lowest levels since before the election. Simply put, the 'soft' data is converging back lower to the dismal reality of the 'hard' data.

Hope is hot in Europe...

And not in USA...

(Click on image to enlarge)

As Output slows dramatically..

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The US economy shifted down a gear in March. A slowing in the pace of growth signalled by the PMI surveys for a second straight month suggests that the economy is struggling to sustain momentum. The survey readings are consistent with annualized GDP growth of 1.7% in the first quarter, down from 1.9% in the final quarter of last year.

“The employment readings from the survey have also deteriorated, suggesting private sector hiring is running at a reduced rate of around 120,000 per month.

“Inflows of new business have moderated in both manufacturing and services, the latter seeing the most worrying slowing. Backlogs of work are also starting to fall again – something which is commonly followed by firms cutting back on their hiring.

“Business confidence ticked higher in March, however, providing some brighter news on the outlook and a glimmer of hope that the growth trend will pick up again in the second quarter.”

The bottom line is that 'animal spirits' are fading fast.