Global| Mar 03 2014U.S. ISM Index Begins to Recover
by:Tom Moeller
|in:Economy in Brief
Summary
The factory sector began to bounce back last month following heavy winter snowfalls. The Composite Index of Manufacturing Sector Activity from the Institute for Supply Management improved to 53.2 during February from 51.3 in January. [...]
The factory sector began to bounce back last month following heavy winter snowfalls. The Composite Index of Manufacturing Sector Activity from the Institute for Supply Management improved to 53.2 during February from 51.3 in January. The latest reading beat expectations for little change at 51.5 as measured by the Action Economics Forecast Survey. Any figure above 50 indicates an increasing level of activity in the factory sector. During the last ten years, there has been a 76% correlation between the ISM index and the q/q change in real GDP.
Recoveries in inventories (52.5) and supplier deliveries (slower) prompted the improvement in last month's factory sector. New orders also rose slightly (54.5). Offsetting these gains was a sharply lower reading for production (48.2) and an unchanged employment figure (52.3). During the last ten years there has been an 88% correlation between the employment index and the m/m change in factory payrolls. The new export orders index fell to 53.5, the lowest reading since September and the imports index was unchanged at 53.5, the lowest reading since January of last year.
The prices paid index series slipped marginally to 60.0 but remained near the highest level in twelve months. Twenty seven percent of firms raised prices while seven percent lowered them. During the last ten years there has been a 67% correlation between the index and the m/m change in the intermediate producer price index.
The figures from the Institute For Supply Management (ISM) are diffusion indexes and can be found in Haver's USECON database. The expectations number is in the AS1REPNA database.
| ISM Mfg | Feb | Jan | Dec | Feb'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Composite Index | 53.2 | 51.3 | 56.5 | 53.1 | 53.9 | 51.8 | 55.2 |
| New Orders | 54.5 | 51.2 | 64.4 | 55.7 | 57.2 | 53.1 | 56.4 |
| Production | 48.2 | 54.8 | 61.7 | 54.5 | 57.7 | 53.8 | 57.4 |
| Employment | 52.3 | 52.3 | 55.8 | 52.2 | 53.2 | 53.8 | 57.4 |
| Supplier Deliveries | 58.5 | 54.3 | 53.7 | 51.5 | 51.9 | 50.0 | 54.7 |
| Inventories | 52.5 | 44.0 | 47.0 | 51.5 | 49.4 | 48.2 | 50.1 |
| Prices Paid Index (NSA) | 60.0 | 60.5 | 53.5 | 61.5 | 53.8 | 53.2 | 65.2 |
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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