Recent Updates

  • Singapore: New Registered & Deregistered Motor Vehicles (Nov)
  • Japan: Corporate Goods Price Index (Nov), Machinery Orders, Machine Equipment Production (Oct)
  • Australia: ADI Property Exposures statistics, ADI Property Exposures Statistics (Q3), WMI Consumer Sentiment, Unemployment Expectations (Dec)
  • Korea: Labor Market (Nov)
  • China: Mobile Phone Shipment (Nov), Innovation Index (2017)
  • more updates...

Economy in Brief

ISM Index Down Slightly; As Expected
by Tom Moeller September 4, 2007

The Institute of Supply Management (ISM) reported that the Composite Index of activity in the manufacturing sector fell slightly last month to 52.9 from 53.8 during July. Consensus expectations had been for a reading of 53.0.


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. It is appropriate to correlate the ISM index level with factory sector growth. The ISM index is a diffusion index. It measures growth by being constructed using all of the absolute change in activity added to one half of the no change in activity measures.


The prices index also fell two points to its lowest level since February. During the last twenty years there has been a 77% correlation between the price index and the three month change in the PPI for intermediate goods.


Declines in three of the index's five components led the composite index 's decline last month. New orders fell 2.2 points to its lowest since March. The inventory index and the supplier delivery measure fell as well. The employment index, however, rose to the highest level in four months and production index recouped a small piece of its sharp July decline. 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 index of new export orders rose slightly to its highest level in three months. The import index, however, fell sharply to its lowest level since 2003.

The prices paid index fell two points to its lowest level since February. During the last twenty years there has been a 77% correlation between the price index and the three month change in the PPI for intermediate goods.

at the Federal Reserve Bank of Kansas City's Economic Symposium, Jackson Hole, Wyoming can be found above.

 AugustJulyAugust '06200620052004
Composite Index 52.9 53.8 54.3 53.9 55.5 60.5
  New Orders Index 55.3 57.5 54.6 55.4 57.4 63.5
Prices Paid Index (NSA) 63.0 73.0 78.5 65.0 66.4 79.8
close
large image