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Economy in Brief
U.S. Productivity Weakness Revised Little; Unit Labor Costs Still Firm
Productivity growth in the nonfarm business sector last quarter was revised to -0.2% at an annual rate (+1.5%) y/y...
U.S. Gasoline and Nat Gas Prices Fall While Crude Oil Prices Were Mixed
In the week ended December 9, retail gasoline prices edged down to $2.56 per gallon (+5.8% y/y)...
ZEW Assessments and Expectations Improve But Gain Less Markedly
The ZEW global macroeconomic assessments have improved along a broad front in December following a surge of improvement in November...
NABE Projections for Moderate Growth and Inflation Are Little Revised
The National Association for Business Economics expectations of 1.8% growth in real GDP during 2020...
German Trade Data Tell a Tale of Two Germanys
Germany's October trade report is better than expected...
by Tom Moeller May 1, 2019
The ISM manufacturing index unexpectedly fell to 52.8 in April from 55.3 in March, making it the weakest reading since October 2016. The index remained below its expansion peak of 60.8 last August. The Action Economics Forecast Survey anticipated m/m improvement to 55.0. Since 2008, there has been a 73% correlation between the index level and quarterly growth in real GDP.
Notable weakness last month was evident in several series in the ISM survey. The new orders index fell to 51.7 from 57.4. The reading was below the December 2017 peak of 67.3. The production reading of 52.3 compared to 55.8 in March and was the lowest figure since August 2016.
The employment figure fell to 52.4 and roughly equaled its lowest level since November 2016. A lessened 20% of respondents reported higher payrolls while a steady 12% reported a decline. Since 2008 there has been an 84% correlation between the employment index and the m/m change in factory sector payrolls.
The prices paid series, which is not part of the composite series, declined to 50.0 from 54.3, down from the high of 79.5 in May of last year. A steady 19% of respondents reported higher prices while lower prices were also reported by 19%.
Improvement m/m was registered in the inventories index. Its rise to 52.9 placed it in line with the readings since early last year. The supplier delivery index was little changed at 54.6, down sharply since the high of 67.6 last June. It's now indicating notably quicker product deliver speeds.
Amongst other series in the ISM survey, the export index fell sharply to the lowest level since early 2016, and it suggested outright declines in exports. The order backlog measure rose slightly m/m but also remained well below its May 2018 high.
The ISM figures are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. Commodity prices can be found in USECON as well as the CMDTY database. The expectations number is available in Haver's AS1REPNA database.
| ISM Mfg (SA) | Apr | Mar | Feb | Apr'18 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Headline Index | 52.8 | 55.3 | 54.2 | 57.9 | 58.8 | 57.4 | 51.3 |
| New Orders | 51.7 | 57.4 | 55.5 | 61,7 | 61.4 | 62.2 | 54.5 |
| Production | 52.3 | 55.8 | 54.8 | 58.6 | 60.7 | 60.9 | 53.8 |
| Employment | 52.4 | 57.5 | 52.3 | 55.2 | 56.9 | 56.8 | 49.1 |
| Supplier Deliveries | 54.6 | 54.2 | 54.9 | 61.1 | 62.0 | 56.8 | 51.8 |
| Inventories | 52.9 | 51.8 | 53.4 | 52.9 | 52.9 | 50.4 | 47.5 |
| Prices Paid Index (NSA) | 50.0 | 54.3 | 49.4 | 79.3 | 71.7 | 65.0 | 53.1 |
