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Economy in Brief

ISM Index About Stable, Prices Down
by Tom Moeller September 1, 2006

At 54.5, the August composite index of manufacturing sector activity from the Institute for Supply Management was about stable with the July figure of 54.7. Consensus expectations had been for a reading of 54.9.

During the last ten years there has been a 67% correlation between the ISM index and three month growth in factory sector industrial production.

A decline in the new orders index to 54.2 was offset by a rise in employment which at 54.0 was at the highest level since April.

During the last twenty years there has been a 66% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.

The production index slipped to 56.6 from 57.6 in July while the vendor deliveries (55.0) and the inventory (50.2) indexes were about stable.

The price index dropped to 73.0, its lowest level since April. During the last twenty years there has been a 91% correlation between the price index and the three month change in the PPI for intermediate goods less food & energy.

ISM Manufacturing Survey August July August '05 2005 2004 2003
Composite Index 54.5 54.7 53.5 55.5 60.5 53.3
Prices Index (NSA) 73.0 78.5 62.5 66.4 79.8 59.6
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