Global| Mar 01 2011U.S. Factory Sector Expansion Gains Steam
by:Tom Moeller
|in:Economy in Brief
Summary
Last month, the Composite Index of activity in the factory sector from the Institute for Supply Management increased to 61.4 from an unrevised 60.8 in January. The figure beat consensus expectations for a reading of 60.6. The latest [...]
Last month, the Composite Index of activity in the factory sector from the Institute for Supply Management increased to 61.4 from an unrevised 60.8 in January. The figure beat consensus expectations for a reading of 60.6. The latest was the highest level since May 2004 and was the nineteenth 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.) The ISM data is available in Haver's USECON database.
Most of the component series rose last month. The production and employment series led the gain. The latter index rose m/m to 64.5. It was the highest level since 1973 and was the seventeenth consecutive month above 50. Thirty-five percent of firms reported higher employment while nine percent reported it lower. During the last ten years there has been a 91% correlation between the index level and the m/m change in factory sector employment.
The new orders series ticked up to 68.0, its highest since January 2004. Separately, the export order index to rose to 62.5, its highest level since July 1998. During the last ten years there has been an 85% correlation between the level of the index and the quarterly change in merchandise exports. Thirty-one percent of respondents reported higher export orders while six percent reported orders lower.
The separate index of prices paid rose to 81.5, its highest level since July 2008 and up from the December '08 low of 18.0. Sixty-six 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.
Semiannual Monetary Policy Report To Congress by Fed Chairman Ben S. Bernanke can be found here.
| ISM Mfg | Feb | Jan | Dec | Feb'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Composite Index | 61.4 | 60.8 | 58.5 | 57.1 | 57.3 | 46.3 | 45.5 |
| New Orders | 68.0 | 67.8 | 62.0 | 61.9 | 59.2 | 51.6 | 42.1 |
| Employment | 64.5 | 61.7 | 58.9 | 57.3 | 57.3 | 40.5 | 43.3 |
| Production | 66.3 | 63.5 | 63.0 | 58.8 | 61.1 | 50.5 | 45.1 |
| Supplier Deliveries | 59.4 | 58.6 | 56.7 | 60.0 | 58.1 | 51.5 | 51.6 |
| Inventories | 48.8 | 52.4 | 51.8 | 46.4 | 50.8 | 37.1 | 45.5 |
| Prices Paid Index (NSA) | 82.0 | 81.5 | 72.5 | 67.0 | 68.9 | 48.3 | 66.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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