February Manufacturing ISM Comes At 56.5, Down From 58.4 In January, And Below Consensus Of 58.0
According to the ISM "Economic activity in the manufacturing sector expanded in February for the seventh consecutive month, and the overall economy grew for the 10th consecutive month." Too bad none of this China-driven production is making one iota of impact on the broader unemployment rate. Still, as ISM came in over 50 we are supposed to rejoice as it indicates economic expansion. Notably, the inventory direction as designated by the ISM is one of contraction. What happens if China ever turns off the liquidity spigot is unclear, but we have seen what programs that take from the futures to today do to subsequent demand. Look for a comparable inflection point in the ISM when consistent Chinese GDP "growth "of 12% starts being perceived as just a tad kooky.
ISM respondents commentary:
- "Depends on division, plant and market served." (Transportation Equipment)
- "Current economy has killed new capital sales." (Machinery)
- "Commodities are firming again." (Food, Beverage & Tobacco Products)
- "First quarter orders up compared to prior two years!" (Fabricated Metal Products)
- "...lead times for electronic parts are pushing out to 8 to 24 weeks." (Computer & Electronic Products)
The last comment should be the most troubling to tech sector fans.
- advertisements -