Last Update: 02-Jul-15 16:51 ET
- The ISM Manufacturing Index increased to 53.5 in June from 52.8 in May. The Briefing.com Consensus expected the index to increase to 53.2.
- A small acceleration in new orders growth (56.0 from 55.8) was not enough to keep production growth from slowing or to restock manufacturer backlogs. Production activities softened as the index fell to 54.0 in June from 54.5 in May. Unfilled orders contracted as the related index declined to 47.0 in June from 53.5 in May.
- Without a steady supply of backlogs, production growth will be highly reliant on future new orders gains.
- The Employment Index rose to 55.5 in June from 51.7 in May.
- 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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