Last Update: 01-Jul-14 10:23 ET
- The ISM Manufacturing Index fell slightly to 55.3 in June from 55.4 in May. The Briefing.com consensus expected the ISM Index to increase to 55.8.
- Considering that nearly all of the regional Federal Reserve manufacturing surveys showed an acceleration in manufacturing activity in June, the deceleration registered in the national ISM Index was disappointing and confusing.
- New orders managed to increase to 58.9 in June from 56.9 in May. Order backlogs contracted, falling to 48.0 in June from 52.5 in May.
- Normally a gain in new orders coupled with a decline in backlogs would come from accelerated production growth. That was not the case in June as the Production Index fell to 60.0 from 61.0 in May.
- The Employment Index was flat at 52.8.
- 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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