Global| Dec 01 2014U.S. ISM Manufacturing Index Suggests Firm Activity; Prices Plunge
by:Tom Moeller
|in:Economy in Brief
Summary
Despite a slip in the November ISM Composite Index of Factory Sector Activity to 58.7, improvement in factory sector activity continues. The latest reading left the three-month average at 58.1, close to its highest level since [...]
Despite a slip in the November ISM Composite Index of Factory Sector Activity to 58.7, improvement in factory sector activity continues. The latest reading left the three-month average at 58.1, close to its highest level since early-2011. Expectations in the Action Economics Forecast Survey had been for 58.9.
Slight m/m improvement in new orders brought the three-month average to its highest point since early-2004. An improved supplier deliveries index indicated the slowest delivery speeds in nine months. Off slightly m/m was the production measure, though on a three-month basis it too was at the best level since early-2004. The employment reading declined m/m following its Q3 jump, but continued to suggest improvement in factory sector hiring. During the last ten years, there has been an 88% correlation between the index level and the m/m change in factory sector payroll employment. The inventories reading retraced its October gain.
Order backlogs gained to the best level since April while new export orders rose to the highest point in three months.
Pricing power diminished greatly last month. The prices index fell nine points to its lowest level since July, 2012. A greatly lessened 14 percent of respondents paid higher prices while 25 percent paid less, the most since July, 2010.
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 | Nov | Oct | Sep | Nov'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Composite Index | 58.7 | 59.0 | 56.6 | 57.0 | 53.9 | 51.8 | 55.2 |
| New Orders | 66.0 | 65.8 | 60.0 | 63.4 | 57.2 | 53.1 | 56.4 |
| Production | 64.4 | 64.8 | 64.6 | 62.4 | 57.7 | 53.8 | 57.4 |
| Employment | 54.9 | 55.5 | 54.6 | 55.4 | 53.2 | 53.8 | 57.4 |
| Supplier Deliveries | 56.8 | 56.2 | 52.2 | 53.3 | 51.9 | 50.0 | 54.7 |
| Inventories | 51.5 | 52.5 | 51.5 | 50.5 | 49.4 | 48.2 | 50.1 |
| Prices Paid Index (NSA) | 44.5 | 53.5 | 59.5 | 52.5 | 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.
