01/03 Economic Data: A Brief Recap

Two pieces of economic data were released today; the ISM manufacturing index and construction spending.

The ISM composite index move to 57.0 from November’s reading of 56.6. This was only slightly lower than the 57.0 consensus. A level above 50 indicates growth, below 50 contraction. Growth was the strongest in New orders and Production. Prices increased by 3.0 to 72.5. This warrants watching to see how it plays into profit margins going forward. Employment, while still growing, fell 1.8 to 55.7. For detail into each component see table below (via ISM).

MANUFACTURING AT A GLANCE
DECEMBER 2010
Index Series
Index
December
Series
Index
November
Percentage
Point
Change
Direction Rate
of
Change
Trend*
(Months)
PMI 57.0 56.6 +0.4 Growing Faster 17
New Orders 60.9 56.6 +4.3 Growing Faster 18
Production 60.7 55.0 +5.7 Growing Faster 19
Employment 55.7 57.5 -1.8 Growing Slower 13
Supplier Deliveries 55.9 57.2 -1.3 Slowing Slower 19
Inventories 51.8 56.7 -4.9 Growing Slower 6
Customers’ Inventories 40.0 45.5 -5.5 Too Low Faster 21
Prices 72.5 69.5 +3.0 Increasing Faster 18
Backlog of Orders 47.0 46.0 +1.0 Contracting Slower 4
Exports 54.5 57.0 -2.5 Growing Slower 18
Imports 50.5 53.0 -2.5 Growing Slower 16
OVERALL ECONOMY Growing Faster 20
Manufacturing Sector Growing Faster 17

Construction spending was up 0.4% versus 0.7% in the prior month. Consensus was for 0.1% growth. The report seems to be indicating that while construction spending is still soft, it may have bottomed. Year-over-year chart in construction spending below via Econoday.

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