The April Composite Index of activity in the manufacturing sector compiled by the Institute of Supply Management fell unexpectedly to 53.3. The index has fallen steadily from the peak of 62.8 roughly one year ago. Consensus expectations had been for stability in April at 55.0.

During the last twenty years there has been a 69% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.

The new orders (53.7) component more than reversed the slight gain in March and fell to the lowest level in nearly two years but the index of export orders (57.2) recovered about all of the March decline. The employment index (52.3) fell for the third straight month to the lowest since November 2003. During the last twenty years there has been a 69% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.

The production index ticked higher but vendor deliveries and inventories fell.

The prices paid index fell after the sharp rise in March.