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Economy in Brief

U.S. Factory Sector Momentum Stalls
by Tom Moeller  April 1, 2011

Still near its recent high, the Composite Index of activity in the factory sector from the Institute for Supply Management slipped to 61.2 from an unrevised 61.4 in February. The figure roughly matched Consensus expectations for 61.3. Nevertheless, the latest reading continued to indicate positive factory growth and was the twentieth consecutive monthly figure above the break-even 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.)

Declines in most of the component ISM series contributed to the downtick in the composite index. The largest m/m decline was in new orders to the lowest level since December. The jobs figure also fell but it only reversed half of its February gain. The inventory index fell to its lowest since June of last year. Offsetting the declines last month were increases in production, to the highest level since January 2004, and supplier deliveries, indicating the slowest delivery speeds in twelve months.

The separate index of prices paid rose to 85.0, its highest level since July 2008 and up from the December '08 low of 18.0. Seventy-two percent of respondents reported higher prices while just two percent indicated lower prices.

The ISM figures can be found in Haver's USECON database. The forecast data is in the AS1REPNA database.

Regulating Systemic Risk is yesterday's speech by Fed Governor Daniel K. Tarullo and it can be found here.

ISM Mfg Mar Feb Jan Feb'10 2010 2009 2008
Composite Index 61.2 61.4 60.8 60.4 57.3 46.3 45.5
 New Orders 63.3 68.0 67.8 62.9 59.2 51.6 42.1
 Employment 63.0 64.5 61.7 55.8 57.3 40.5 43.3
 Production 69.0 66.3 63.5 64.3 61.1 50.5 45.1
 Supplier Deliveries 63.1 59.4 58.6 64.1 58.1 51.5 51.6
 Inventories 47.4 48.8 52.4 54.7 50.8 37.1 45.5
Prices Paid Index (NSA) 85.0 82.0 81.5 75.0 68.9 48.3 66.5
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