Global| Oct 03 2011U.S. ISM Factory Index Recovers Marginally
by:Tom Moeller
|in:Economy in Brief
Summary
Downward momentum in factory sector activity stabilized last month. The Institute for Supply Management reported that its September Composite Index of factory sector activity rose slightly to 51.6 from an unrevised 50.6 in August. [...]
Downward momentum in factory sector activity stabilized last month. The Institute for Supply Management reported that its September Composite Index of factory sector activity rose slightly to 51.6 from an unrevised 50.6 in August. Regardless, the figure remained nearly the lowest since the economic recovery began two years ago. The reading beat Consensus expectations for stability at 50.5. It indicated positive, but slower, factory growth and was the twenty-sixth consecutive monthly figure above the break-even level of 50.
The performance of the index's five components remained mixed last month. The production, supplier delivery and employment series rose modestly. During the last ten years there has been a 91% correlation between the employment series level and the m/m change in factory sector payrolls. The inventory index slipped and the new orders series was unchanged.
The price reading improved slightly m/m to 56.0 in September but remained near the lowest since November, 2009. Twenty-six percent of firms raised prices, less than half that four months ago, while fourteen percent lowered them, the least in three months. 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 recovered most of the prior month's decline with a rise to a still-low 53.5. The imports series slipped m/m but it remained in its range since early-last year.
The ISM figures are diffusion indexes and can be found in Haver's USECON database. The expectations data are in the AS1REPNA database.
Lessons from Emerging Market Economies on the Sources of Sustained Growth is the title of last week's speech by Fed Chairman Ben S. Bernanke and it can be found here.
| ISM Mfg | Sep | Aug | Jul | Sep'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Composite Index | 51.6 | 50.6 | 50.9 | 55.3 | 57.3 | 46.3 | 45.5 |
| New Orders | 49.6 | 49.6 | 49.2 | 51.6 | 59.3 | 51.7 | 42.1 |
| Employment | 53.8 | 51.8 | 53.5 | 56.9 | 57.3 | 40.6 | 43.1 |
| Production | 51.2 | 48.6 | 52.3 | 58.1 | 61.1 | 50.5 | 45.1 |
| Supplier Deliveries | 51.4 | 50.6 | 50.4 | 53.8 | 58.1 | 51.5 | 51.6 |
| Inventories | 52.0 | 52.3 | 49.3 | 56.0 | 50.8 | 37.1 | 45.5 |
| Prices Paid Index (NSA) | 56.0 | 55.5 | 59.0 | 70.5 | 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.
