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Economy in Brief

U.S. ISM Manufacturing Index Rebounds Unexpectedly; Prices Ease
by Tom Moeller  November 3, 2014

The ISM Composite Index of Factory Sector Activity rebounded to 59.0 last month following an unrevised decline to 56.6 during September. The latest level matched its highest since March, 2011. Expectations in the Action Economic Forecast Survey had been for a slip to 56.3.

A rebounding new orders index and a higher supplier deliveries index led the total higher, the latter indicating the slowest delivery speeds since February. The employment index made up a small piece of its September decline. During the last ten years there has been an 89% correlation between the index level and the m/m change in factory sector payrolls. The inventories and production indexes also recovered following earlier declines.

Pricing pressure eased as shown by the price index falling to its lowest level since December. A lessened 21% of firms reported higher prices and an increased 14% reported them lower.

The inventories index rebounded to nearly its recent high and order backlogs firmed to the middle of the recent range. The export orders index fell, however, to the lowest level since May of last year.

The figures from the Institute For Supply Management (ISM) are diffusion indexes and can be found in Haver's USECON database. The expectations number is in the AS1REPNA database.

Economic Policy, Economic Modeling and Unknown Unknowns from the Federal Reserve Bank of Atlanta is available here.

ISM Mfg Oct Sep Aug Oct'13 2013 2012 2011
Composite Index 59.0 56.6 59.0 56.6 53.9 51.8 55.2
 New Orders 65.8 60.0 66.7 61.3 57.2 53.1 56.4
 Production 64.8 64.6 64.5 60.8 57.7 53.8 57.4
 Employment 55.5 54.6 58.1 54.3 53.2 53.8 57.4
 Supplier Deliveries 56.2 52.2 53.9 54.1 51.9 50.0 54.7
 Inventories 52.5 51.5 52.0 52.5 49.4 48.2 50.1
Prices Paid Index (NSA) 53.5 59.5 58.0 55.5 53.8 53.2 65.2
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