The Oct ISM mfr’g figure unexpectedly rose to 51.7 from 51.5 in Sept and that’s slightly better than expectations of 51.0. It’s the 2nd month in a row above 50 following the 3 prior months barely below. New Orders rose almost 2 pts to 54.2 but Backlogs were lower by 2.5 pts to 41.5, the lowest since Sept ’11. Employment fell 2.6 pts to 52.1 and is back below the 6 month average of 54. Importantly, Export Orders fell .5 pt to 48.0 and is now below 50 for the 5th straight month. Inventories at the mfr’g and customer levels were down slightly. Prices Paid fell 3 pts after rising 4 pts in Sept. Reflecting the mixed state of mfr’g, of the 18 industries surveyed, 8 saw growth, 8 contraction with the balance seeing no change. The ISM summed up the report with this quote, “Comments from the panel this month reflect continued concern over a fragile global economy and soft orders across several manufacturing sectors.” Bottom line, the market breathed a sigh of relief that not only did the ISM remain above 50 but also rose a touch from Sept. This said, the components were mixed and point to a still sluggish pace of activity, in large part due to weakness overseas but of course a muted pace of cap ex because of our own fiscal ineptitude. This is also reflected in the jobs outlook as tomorrow is supposed to show the 3rd month in a row of mfr’g job losses.

Category: MacroNotes

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