Last Update: 01-Oct-14 10:28 ET
- The ISM Manufacturing Index fell to 56.6 in September from 59.0 in August. The Briefing.com consensus expected the index to fall to 58.5.
- Most of the regional Federal Reserve manufacturing surveys showed solid gains in September, which contrasted with the pullback recorded in the national index.
- Production levels modestly accelerated as the related index increased to 64.6 in September from 64.5 in August. Unfortunately, the gains in production came about from manufacturers reducing their number of unfilled orders instead of new order demand. The Backlog of Orders Index contracted, falling from 52.5 in August to 47.0 in September, while the New Orders Index dropped to 60.0 from 66.7.
- Employment growth softened as the related index fell to 54.6 in September from 58.1 in August.
- This is a highly overrated index. It is merely a survey of purchasing managers. It is a diffusion index, which means that it reflects the number of people saying conditions are better compared to the number saying conditions are worse. It does not weight for size of the firm, or for the degree of better/worse. It can therefore underestimate conditions if there is a great deal of strength in a few firms. The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle. It must be recognized that the index is not hard data of any kind, but simply a survey that provides broad indications of trends.
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