Global| May 01 2012U.S. ISM Factory Index Unexpectedly Improves Further
by:Tom Moeller
|in:Economy in Brief
Summary
Factory sector activity continued on the mend last month. The April ISM Composite Index of industrial sector activity rose to 54.8 from an unrevised 53.4 in March. The gain compared to Consensus expectations for a slip to 53.0. The [...]
Factory sector activity continued on the mend last month. The April ISM Composite Index of industrial sector activity rose to 54.8 from an unrevised 53.4 in March. The gain compared to Consensus expectations for a slip to 53.0. The latest was the highest level since June of last year. A figure above the break-even level of 50 continued to indicate an expanding level of overall activity. During the last ten years there has been an 80% correlation between the index level and the three-month change in factory sector production.
Changes in the component indexes were broadly positive, led by the gain in new orders to 58.2. That was followed by higher readings for production (61.0), supplier deliveries (49.2) and employment (57.3). During the last ten years there has been an 88% correlation between the employment series level and the m/m change in factory sector payrolls. The inventory index declined to its lowest level (48.5) since December.
The price index was unchanged at 61.0, and for the fourth consecutive month was above the break-even level of 50. Thirty three percent of firms raised prices while eleven 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 to 59.0 and made up most of the March decline. The imports series was unchanged at 53.5.
The figures from the Institute For Supply Management (ISM) are diffusion indexes and can be found in Haver's USECON database. The expectations data are in the AS1REPNA database.
| ISM Mfg | Apr | Mar | Feb | Apr'11 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Composite Index | 54.8 | 53.4 | 52.4 | 59.7 | 55.2 | 57.3 | 46.4 |
| New Orders | 58.2 | 54.5 | 54.9 | 62.7 | 56.4 | 59.2 | 52.0 |
| Production | 61.0 | 58.3 | 55.3 | 60.8 | 57.4 | 61.0 | 50.8 |
| Employment | 57.3 | 56.1 | 53.2 | 60.6 | 57.4 | 57.3 | 40.7 |
| Supplier Deliveries | 49.2 | 48.0 | 49.0 | 59.7 | 54.7 | 58.1 | 51.6 |
| Inventories | 48.5 | 50.0 | 49.5 | 54.5 | 50.1 | 50.8 | 37.1 |
| Prices Paid Index (NSA) | 61.0 | 61.0 | 61.5 | 85.5 | 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.
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