Global| Feb 01 2012U.S. ISM Factory Index Nudges Higher as Pricing Improves
by:Tom Moeller
|in:Economy in Brief
Summary
Factory sector activity is improving but it's hardly robust. The Composite Index of factory sector activity from the Institute For Supply Management rose to 54.1 from a revised 53.1 in December. The latest reading roughly matched [...]
Factory sector activity is improving but it's hardly robust. The
Composite Index of factory sector activity from the Institute For
Supply Management rose to 54.1 from a revised 53.1 in December. The
latest reading roughly matched Consensus expectations and earlier
data reflected updated seasonal factors. The reading was the highest
since July of 2010 and was the thirtieth consecutive monthly figure
above the break-even level of 50.
Month-to-month improvement amongst the index components was scattered with the strongest gain in inventories accompanied by higher new orders and supplier delivery speeds. The production figure fell from its recent high and the employment number slipped. During the last ten years there has been an 89% correlation between the employment series level and the m/m change in factory sector payrolls.
The price index rose a sharp eight points to 55.5, the first month above the break-even level of 50 since September. Thirty percent of firms raised prices, the most since July, while a reduced nineteen percent lowered them. During the last ten years there has been an 83% correlation between the index and the m/m change in the core intermediate producer price index.
The separate index of new export orders rose slightly to 55.0, its best since April. The imports series slipped to 52.5.
The ISM figures are diffusion indexes and can be found in Haver's USECON database. The expectations data are in the AS1REPNA database.
| ISM Mfg | Jan | Dec | Nov | Jan'11 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Composite Index | 54.1 | 53.1 | 52.2 | 59.9 | 55.2 | 57.3 | 46.4 |
| New Orders | 57.6 | 54.8 | 55.0 | 63.8 | 56.4 | 59.2 | 52.0 |
| Production | 55.7 | 58.9 | 55.7 | 63.5 | 57.4 | 61.0 | 50.8 |
| Employment | 54.3 | 54.8 | 52.4 | 60.7 | 57.4 | 57.3 | 40.7 |
| Supplier Deliveries | 53.6 | 51.5 | 51.3 | 59.3 | 54.7 | 58.1 | 51.6 |
| Inventories | 49.5 | 45.5 | 46.5 | 52.0 | 50.1 | 50.8 | 37.1 |
| Prices Paid Index (NSA) | 55.5 | 47.5 | 45.0 | 81.5 | 65.2 | 68.9 | 48.3 |
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.
More Economy in Brief
