Global| Mar 01 2016U.S. ISM Factory Index and Prices Improve
by:Tom Moeller
|in:Economy in Brief
Summary
The ISM Composite Index of factory sector activity rose to 49.5, the highest level since September. It indicated a decline in factory sector activity for the fifth straight month, but exceeded expectations for 48.5 in the Action [...]
The ISM Composite Index of factory sector activity rose to 49.5, the highest level since September. It indicated a decline in factory sector activity for the fifth straight month, but exceeded expectations for 48.5 in the Action Economics Forecast Survey. The data from the Institute for Supply Management (ISM) are diffusion indexes where a reading below 50 indicates decline.
Improvement in the production series to 52.8 from 50.2 led the overall increase, as it indicated a rising level of output for a second month. The employment figure increased as well to 48.5 from 45.9. As it remained below 50, however, it suggested a decline in payrolls for the fourth month in the last five. During the last ten years, there has been an 88% correlation between the index and the m/m change in factory sector payrolls. The inventory series also gained to 45.0, suggesting the slowest rate of decumulation since October.
Holding steady m/m at 51.5 was the new orders figure. It suggested a modestly higher level of bookings following two earlier months of decline. The supplier delivery series declined to 49.7, continuing the sideways move in place since early last year.
The prices paid series rose to 38.5, showing the slowest rate of price decline since October. Nine percent (NSA) of respondents reported higher prices while 32% indicated lower prices.
The new export orders index eased to 46.5, suggesting the quickest rate of orders decline since July 2012. The import index eased slightly, but overall order backlogs rose to 48.5, the highest level in nine months.
The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number is in Haver's AS1REPNA database.
| ISM Mfg (SA) | Feb | Jan | Dec | Feb '15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Index | 49.5 | 48.2 | 48.0 | 53.3 | 51.3 | 55.6 | 53.8 |
| New Orders | 51.5 | 51.5 | 48.8 | 53.8 | 52.6 | 58.9 | 56.8 |
| Production | 52.8 | 50.2 | 49.9 | 54.7 | 53.5 | 59.2 | 57.5 |
| Employment | 48.5 | 45.9 | 48.0 | 52.0 | 51.0 | 54.4 | 53.1 |
| Supplier Deliveries | 49.7 | 50.0 | 49.8 | 53.7 | 50.7 | 55.0 | 51.9 |
| Inventories | 45.0 | 43.5 | 43.5 | 52.5 | 49.0 | 50.8 | 49.4 |
| Prices Paid Index (NSA) | 38.5 | 33.5 | 33.5 | 35.0 | 39.8 | 55.6 | 53.8 |
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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