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Economy in Brief
UK Consumer Sentiment Hits Lowest Reading since 1996
(when the GFK survey began; also lowest reading 'ever')
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
CBI Gauge in the UK Continues to Be Upbeat
The global economy has a lot of challenges...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller June 3, 2019
The ISM manufacturing index unexpectedly declined to 52.1 during May from 52.8 in April. It was the lowest level since October 2016 and remained below the expansion peak of 60.8 last August. The Action Economics Forecast Survey anticipated a reading of 53.0. Since 2008, there has been a 73% correlation between the index level and quarterly growth in real GDP.
Performance amongst the ISM index components was mixed last month. The supplier delivery series fell to 52.0 from 54.6 and indicated the quickest product delivery speeds since October 2016. The inventories index declined to 50.9 from 52.9, but has been fairly stable since early last year. The production series fell one point to 51.3. That was below the January 2018 high of 65.5 and was the lowest level since August 2016. Offsetting these declines was a rise in the new orders index to 52.7 from 51.7. The reading remained, however, below the December 2017 peak of 67.3.
Also inching higher was the employment figure to 53.7 from 52.4. Nevertheless, it still was the lowest level since April 2017. A higher 23% (NSA) of respondents reported higher payrolls while a higher 13% 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, improved to 53.2, but remained below the high of 79.5 in May of last year. A slightly higher 22% of respondents reported increased prices while lower prices were reported by a lessened 16%.
Amongst other series in the ISM survey, the export index rose modestly to 51.0, but remained significantly below February 2018 high of 62.8. The order backlog measure dropped sharply to a three-year low.
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) | May | Apr | Mar | May'18 | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Headline Index | 52.1 | 52.8 | 55.3 | 58.7 | 58.8 | 57.4 | 51.3 |
New Orders | 52.7 | 51.7 | 57.4 | 62.9 | 61.4 | 62.2 | 54.5 |
Production | 51.3 | 52.3 | 55.8 | 61.5 | 60.7 | 60.9 | 53.8 |
Employment | 53.7 | 52.4 | 57.5 | 56.7 | 56.9 | 56.8 | 49.1 |
Supplier Deliveries | 52.0 | 54.6 | 54.2 | 62.1 | 62.0 | 56.8 | 51.8 |
Inventories | 50.9 | 52.9 | 51.8 | 50.2 | 52.9 | 50.4 | 47.5 |
Prices Paid Index (NSA) | 53.2 | 50.0 | 54.3 | 79.5 | 71.7 | 65.0 | 53.1 |