January Manufacturing ISM Comes In At 58.4, Higher Than Consensus (55.5) And December (Downward Revised To 54.9)
The January Manufacturing ISM follows on the heels of the red-hot GDP number, and blows out all expectations, coming in at 58.4, higher than even the higher end of the range, which was between 53.5 and 58.0. As is well known, a reading above 50 indicates expansion. December Mfg ISM was revised down from 55.9 to 54.9 due to a index rebalancing. Every index in the January ISM report came out at a better reading than December.
Despite the phenomenal number, actual respondents were much more muted in their endorsement of the Obama economic stimulus miracle:
- "Commodity prices are moving up again." (Printing & Related Support Activities)
- "We now believe that we will not have a good upturn until the 3rd quarter of 2010." (Primary Metals)
- "Overall activity is significantly higher than we typically see this time of year." (Machinery)
- "Orders from automotive very strong." (Electrical Equipment, Appliances & Components)
- "Lead times continue to be a problem for electronic components." (Computer & Electronic Products)
Furthermore, the customers inventories low print is troubling, as this presumably indicates that much of the stocking has occurred (and is stuck) at pre-processing levels. Thus, the Q4 inventory-led GDP bounce looks even shakier than before.