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Economy in Brief

ISM Factory Sector Index Strengthens
by Tom Moeller  July 3, 2017

The ISM factory sector composite index improved to 57.8 during June from May's reading of 54.9. It was the highest point since August 2014. A level of 55.0 had been expected in the Action Economics Forecast Survey. Earlier figures reflect benchmark revision.

Strength in the component series was widespread. The new orders series gained to 63.5, up from the low of 57.5 three months earlier. The production index rose to 62.4, a four-month high. The supplier deliveries index jumped to 57.0, indicating the slowest pace of product delivery speeds since December 2014. The inventories series fell to 49.0, the lowest level in three months.

The employment figure jumped to 57.2, a three-month high. During the last eight years there has been an 85% correlation between the index and the m/m change in factory sector employment. Twenty-eight percent (NSA) of respondents reported higher employment while 11% indicated a decline.

The prices paid index retreated to 55.0, down from the high of 70.5 three months earlier. It was the lowest prices index since November. Twenty-seven percent (NSA) of respondents reported paying higher prices while 17 percent paid less.

The ISM figures are diffusion indexes where a reading above 50 indicates increase. The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number can be found in Haver's AS1REPNA database.

The Path Forward for U.S. Monetary Policy in a Global Context from James Bullard, President & CEO of the Federal Reserve Bank of St. Louis, can be found here.

ISM Mfg (SA) Jun May Apr Jun'16 2016 2015 2014
Composite Index 57.8 54.9 54.8 52.8 51.5 51.4 55.6
 New Orders 63.5 59.5 57.5 55.6 54.7 52.6 58.9
 Production 62.4 57.1 58.6 54.8 54.0 53.5 59.2
 Employment 57.2 53.5 52.0 50.0 49.7 51.0 54.4
 Supplier Deliveries 57.0 53.1 55.1 54.9 51.9 50.7 55.0
 Inventories 49.0 51.5 51.0 48.5 47.2 49.0 50.8
Prices Paid Index (NSA) 55.0 60.5 68.5 60.5 53.5 39.8 55.6
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