June ISM Manufacturing: 53.5 Percent, Up from 52.8 Percent in May; Seasonal Shenanigans?
From the Institute for Supply Management (paragraph breaks added by me):
Economic activity in the manufacturing sector expanded in June for the 30th consecutive month, and the overall economy grew for the 73rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.
The June PMI® registered 53.5 percent, an increase of 0.7 percentage point over the May reading of 52.8 percent. The New Orders Index registered 56 percent, an increase of 0.2 percentage point from the reading of 55.8 percent in May. The Production Index registered 54 percent, 0.5 percentage point below the May reading of 54.5 percent.
The Employment Index registered 55.5 percent, 3.8 percentage points above the May reading of 51.7 percent, reflecting growing employment levels from May at a faster rate. Inventories of raw materials registered 53 percent, an increase of 1.5 percentage points from the May reading of 51.5 percent.
The Prices Index registered 49.5 percent, the same reading as in May, indicating lower raw materials prices for the eighth consecutive month. Comments from the panel indicate mostly stable to improving business conditions, with the notable exception relating to the oil and gas markets. Also noted is the negative effect on egg prices and availability due to the avian flu outbreak.
Of the 18 manufacturing industries, 11 are reporting growth in June …
Backlog of orders tanked into contraction going from 53.5 percent in May to 47.0 percent in June.
The May report had 14 industries growing. The April report had 15. So in both May and June, the ISM index went up while the number of industries growing went down from 15 to this month’s 11. Hmm.
Zero Hedge is claiming that there’s seasonal fiddling.
Even if they’re wrong about that, ISM has stayed in expansion (i.e. about 50 percent) even as the Fed’s industrial production report has shown manufacturing declines in four of the past six months netting out to -0.8 percent during that period. In other words, it’s not possible to claim that ISM’s results reflect what’s really happening, which is supposed to be the point of the report.
[...] that, given how the group’s Manufacturing Index has been continually flashing expansion while reported factory output, orders and sales have been sharply declining, it’s hard to [...]
Pingback by BizzyBlog — July 6, 2015 @ 6:32 pm
[...] — As I noted the day the report was issued at my home blog, the 11 industries out of 18 which grew in June was lower than the 14 seen in May and 15 seen in [...]
Pingback by BizzyBlog — July 6, 2015 @ 11:40 pm