The January ISM Manufacturing M/M 60.8 vs. Exp. 58.0 compared to the previous print of 58.5. Yet the key metric that everyone is focusing on is the surging Price Paid number, which hit a 2 year high 81.5 (73.5 expectations): the highest since July 31, 2008! The corporate margin collapse is about to cripple Q1 numbers, and at this point it is only a matter of time before even sell-side analysts are forced to aggressively lower their S&P EPS estimates.
- New Orders: 67.8 vs. Prev. 60.9
- Employment: 61.7 vs. Prev. 57.5
And despite the strong number, the responses in the ISM were decidedly gloomy, with a lament on the dollar.
- "Continued weakness in the dollar is having a negative effect on
the components we purchase overseas and increasing our material costs."
- "Lead times are increasing significantly, and commodity pricing is starting to increase." (Chemical Products)
- "January/February sales will be decent, and we see a strong March.
We're cautiously optimistic but reluctant to hire." (Fabricated Metal
- "Business is still slow with no pick-up in sight." (Furniture & Related Products)
- "We continue to see unexpected strength in many non-U.S. markets." (Fabricated Metal Products)
And here is a chart of the Prices Paid vs 10 years. One upon a time these correlation.