Global| Jul 01 2011U.S. ISM Factory Index Recovery Is Modest
by:Tom Moeller
|in:Economy in Brief
Summary
The pace of activity in the U.S. manufacturing sector didn't deteriorate last month, but it didn't improve much either. That's the message from this morning's report on the Composite Index of activity in the factory sector. The [...]
The pace of activity in the U.S. manufacturing sector didn't deteriorate last month, but it didn't improve much either. That's the message from this morning's report on the Composite Index of activity in the factory sector. The Institute for Supply Management indicated that its index rose to 55.3 from an unrevised 53.5 in May. The latest matched the level twelve months ago and compared favorably to Consensus expectations for a decline to 52.2. The reading continued to indicate positive factory growth and was the twenty-third consecutive monthly figure above the break-even level of 50. It was up from the low of 32.5 reached in December '08.
Modest improvement was logged by each of the component series, but it was greatest for inventories where the figure of 54.1 was its highest since November. New orders, production and supplier deliveries rose just modestly. However, the greater gain in the employment series continues to indicate hiring in the factory sector. 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 separate index of new export orders fell to 53.5, its lowest level in nearly two years. The index of prices also backpedaled to 68.0, its lowest level since August. A reduced 48% (NSA) of respondents reported higher prices while an increased 12% indicated lower prices.
The ISM figures are diffusion indexes and can be found in Haver's USECON database. The forecast data is in the AS1REPNA database.
| ISM Mfg | June | May | Apr | June'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Composite Index | 55.3 | 53.5 | 60.4 | 55.3 | 57.3 | 46.3 | 45.5 |
| New Orders | 51.6 | 51.0 | 61.7 | 57.0 | 59.3 | 51.7 | 42.1 |
| Employment | 59.9 | 58.2 | 62.7 | 55.6 | 57.3 | 40.6 | 43.1 |
| Production | 54.5 | 54.0 | 63.8 | 59.6 | 61.1 | 50.5 | 45.1 |
| Supplier Deliveries | 56.3 | 55.7 | 60.2 | 57.7 | 58.1 | 51.5 | 51.6 |
| Inventories | 54.1 | 48.7 | 53.6 | 46.6 | 50.8 | 37.1 | 45.5 |
| Prices Paid Index (NSA) | 68.0 | 76.5 | 85.5 | 57.0 | 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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