December 3, 2012

Imagine That: ISM Manufacturing Shows Contraction

Filed under: Economy,Taxes & Government — Tom @ 11:15 am

… the first Institute for Supply Management Manufacturing Index after the election comes in showing slight contraction (49.5, with anything below 50 indicating contraction) after an expansionary reading (51.7) just a month earlier.

Readers may remember that yours truly suggested that the orders-related elements of the index (i.e., the ones which lead to sales and truly tie into economic growth) showed signficant weakness in previous months. That’s especially true of orders backlog, which continued to stay in the pits in November, falling from 41.5 to 41.0. New Orders, at 50.3, fell 3.9 points in November. As long as the orders-related numbers stay weak, the manufacturing sector will be weak.

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3 Comments

  1. At least not on GM’s part. In related news:

    GM Channel Stuffing WTF!?

    http://www.zerohedge.com/news/2012-12-03/gm-channel-stuffing-wtf

    Which is why we will present the November update of total dealer “inventory” (which rose to a record for the fresh-start company 788,194, or a record 99K increase in two months) a without commentary, except to say: WTF!?

    Check out the chart Tom, every November the inventory has risen at almost 100k from the November before…

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/11-2/Gm%20Dealer%20Inventory.jpg

    2009 – 438,000
    2010 – 536,000
    2011 – 624,000
    2012 – 788,000

    According to liberals, building inventories are a sign of an upswing in the economy, just look at the GDP figures. The economy is going swimmingly.

    This brings me back to that previous Zero Hedge article showing shrinking US GDP % against the world. Has the under count of inflation really been that bad? If we were to use GM as a gage, any sales unit decline has been offset by a corresponding cost increase to show no decline in dollar terms. Could that be actually correct?

    Comment by dscott — December 3, 2012 @ 12:24 pm

  2. #1, Probably more government mucking around to try and make GM’s situation (and the overall economy) look better than it really is.

    Comment by zf — December 4, 2012 @ 11:18 am

  3. [...] completely unlike the Manufacturing Index released on Monday, the orders-related numbers in today’s release are strong (58.1 and 53.5 for Orders and [...]

    Pingback by BizzyBlog — December 5, 2012 @ 10:21 am

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