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ISM Mfg Index  
Released On 10/2/2017 10:00:00 AM For Sep, 2017
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level58.8 58.0 57.0  to 59.0 60.8 

Highlights
ISM's manufacturing index, already running well beyond strength in factory data out of Washington, is accelerating even further, to an index of 60.8 in September which is a 13-year best. Part of the gain in the index is tied to hurricanes and specifically deliveries times where slowing is translated as strength. But it's more than that. New orders rose 4.3 points in the month to 64.6 which is a 4-year high. And the hurricanes didn't slow down production which is at a very strong 62.2. Employment is a big standout in today's report, posting the first 60 score at 60.3 in 6-1/2 years.

Hurricane effects are evident in input prices, rising 9.5 points to 71.5 and confirming similar strength in this morning's PMI manufacturing report. This is another 6-1/2 year high as are backlog orders which are likely piling up in part due to the delivery delays. Inventory data are stable.

The strength in this report also includes export orders which rose 2 points to 57.0. This sample is running at unsustainably strong levels in contrast to the government's factory data which are no better than mixed, with factory orders clearly on the rise but manufacturing production still soft. It's important to remember that reports like the ISM are, in contrast to government data, based small samples that number no more than several hundred at the very most and all responses are voluntary.

Recent History Of This Indicator
The ISM manufacturing index has been surging this year, beating the consensus the last 4 months in a row and often by very large margins. Production has been unusually strong, over 60 in 3 straight reports in sharp contrast to actual manufacturing production as tracked by the Federal Reserve which posted outright declines in 2 of those months. Other ISM readings are likewise exceptionally strong including new orders, backlog orders and employment. The Econoday consensus for September's headline is 58.0 vs August's 58.8.

Definition
The manufacturing composite index from the Institute For Supply Management is a diffusion index calculated from five of the eleven sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms nationwide. The survey queries purchasing managers about the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The five components of the composite index are new orders, production, employment, supplier deliveries, and inventories (their own, not customer inventories). The five components are equally weighted. The questions are qualitative rather than quantitative; that is, they ask about the general direction rather than the specific level of activity. Each question is adjusted into a diffusion index which is calculated by adding the percentage of positive responses to one-half of the unchanged responses.  Why Investors Care
 
[Chart]
The ISM manufacturing index [formerly known as the NAPM Survey] is constructed so that any level at 50 or above signifies growth in the manufacturing sector. A level above 43 or so, but below 50, indicates that the U.S. economy is still growing even though the manufacturing sector is contracting. Any level below 43 indicates that the economy is in recession.
Data Source: Haver Analytics
 
 

2017 Release Schedule
Released On: 1/32/13/14/35/16/17/38/19/110/211/112/1
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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