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Economy in Brief
U.S. CPI Unchanged in July with Drop in Energy Prices
Consumer prices were unchanged in July after an outsized 1.3% m/m jump in June...
U.S. Federal Government Budget Deficit Shrinks in July
The U.S. Treasury Department reported a federal budget deficit of $211.1 billion in July...
U.S. Mortgage Applications Rose Slightly in the Latest Week
Mortgage applications increased 0.2% (-62.9% y/y) from one week earlier...
German Inflation Rises
The German inflation rate as measured by the HICP accelerated to 8.4% in July...
U.S. Productivity Declines in Q2, Pushing Unit Labor Costs Higher
Nonfarm business sector productivity fell 4.6% (AR) during Q2'22...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller July 1, 2005
In June, the Composite Index of activity in the manufacturing sector compiled by the Institute of Supply Management rose 2.4 points to 53.8 and recovered all of the prior month's decline. Consensus expectations had been for stability at 51.5.
During the last twenty years there has been a 64% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
New orders recovered all of the decline during the prior two months with a 5.5 point rise to 57.2. The index of export orders, however, fell to the lowest since December 2001.
The employment index improved modestly to 49.9 but remained below the break even level of 50 for a second month. During the last twenty years there has been a 67% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
The production index (55.6) rose moderately while the inventories index was unchanged and below 50 for the third consecutive month.
The prices paid index again fell sharply to the lowest since early 2002. During the last twenty years there has been an 81% correlation between vendor delivery speed and prices.
ISM Manufacturing Survey | June | May | June '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Composite Index | 53.8 | 51.4 | 61.2 | 60.5 | 53.3 | 52.4 |
New Orders Index | 57.2 | 51.7 | 61.8 | 63.5 | 57.9 | 56.5 |
Prices Paid Index (NSA) | 50.5 | 58.0 | 81.0 | 79.8 | 59.6 | 57.6 |