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Economy in Brief
PMIs Stabilize or Creep Higher After Drop-Off
In the EMU, both the services and manufacturing sectors took a substantial step down one month ago...
FIBER: Industrial Commodity Prices Strengthen Selectively
The FIBER Industrial Materials Price Index increased 0.4% during the last four weeks...
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
by Tom Moeller July 1, 2010
Growth still is positive, but for the factory sector the pace of improvement waned further last month. The June composite index from the Institute for Supply Management slipped to 56.2 from 59.7 in May. The latest figure disappointed Consensus expectations for a reading of 59.0 but still it was the eleventh consecutive monthly reading above 50. It was up from the low of 32.5 reached in December '08. (Any figure above the break-even point of 50 suggests rising activity.) The ISM data is available in Haver's USECON database.
Declines amongst the subseries were broad-based including new orders, production and vendor performance which all fell sharply. The employment index also fell moderately to 57.8 and reversed the gains of the prior two months. During the last ten years there has been an 89% correlation between the ISM employment index and the m/m change in factory sector payrolls. The inventory index rose modestly.
Also falling sharply was the export order index to its lowest level since December. During the last ten years there has been an 88% correlation between the level of the index and the quarterly change in merchandise exports. Nineteen percent of respondents reported higher export orders while seven reported lower orders.
The separate index of prices paid fell sharply to 57.0 which was the lowest level since November. It remained up from the December '08 low of 18.0. Just 32% (half the recent high) of respondents reported higher prices while 18% indicated lower prices. During the last twenty years there has been an 83% correlation between the price index and the three-month change in the PPI for intermediate goods.
The ISM data are available in Haver's USECON database.
ISM Mfg | June | May | April | June '09 | 2009 | 2008 | 2007 |
---|---|---|---|---|---|---|---|
Composite Index | 56.2 | 59.7 | 60.4 | 45.3 | 46.2 | 45.5 | 51.1 |
New Orders | 58.5 | 65.7 | 65.7 | 49.9 | 51.6 | 42.1 | 54.3 |
Employment | 57.8 | 59.8 | 58.5 | 42.1 | 40.5 | 43.3 | 50.5 |
Production | 61.4 | 66.6 | 66.9 | 53.2 | 50.4 | 45.2 | 54.1 |
Supplier Deliveries | 57.3 | 61.0 | 61.3 | 50.5 | 51.4 | 51.6 | 51.2 |
Inventories | 45.8 | 45.6 | 49.4 | 30.9 | 37.1 | 45.5 | 45.4 |
Prices Paid Index (NSA) | 57.0 | 77.5 | 78.0 | 50.0 | 48.3 | 66.5 | 64.6 |