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ISM Manufacturing Tumbles - The Weather Bounce Is Over
The weather-bounce is over. After 3 months of bounce-back from January's plunge, ISM Manufacturing dropped to 53.2, significantly missing expectations. Across the board the sub-indices were disappointing with rising prices paid (lower margins), falling new orders, falling employment, and falling production. Once again the "meteoroconomists" have outdone themselves as this print was below the lowest estimate (and at the total opposite of Joe Lavorgna's highest of all expectations at 57.0)
The actual print was below the lowest Wall Street estimate:
Here is what everyone's favorite weatherman said on Friday:
Following the better than expected Chicago PMI data for May, we raised our manufacturing #ISM forecast (due Monday) by one point to 57.
— Joseph A. LaVorgna (@Lavorgnanomics) May 30, 2014
And this:
If the #ISM (57.0 v. 54.9) is close to our forecast on Mon, the current quarter average would be consistent with above trend #realGDP growth
— Joseph A. LaVorgna (@Lavorgnanomics) May 30, 2014
So... what happens to GDP now?
The component breakdown:

From the report:
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The May PMI® registered 53.2 percent, a decrease of 1.7 percentage points from April's reading of 54.9 percent, indicating expansion in manufacturing for the 12th consecutive month. The New Orders Index registered 53.3 percent, a decrease of 1.8 percentage points from the 55.1 percent reading in April, indicating growth in new orders for the 12th consecutive month. The Production Index registered 55.2 percent, 0.5 percentage point below the April reading of 55.7 percent. Employment grew for the 11th consecutive month, registering 51.9 percent, a decrease of 2.8 percentage points below April's reading of 54.7 percent. Comments from the panel reflect generally steady growth, but note some areas of concern regarding raw materials pricing and supply tightness and shortages."
The respondents, as usual, focus on the silver lining:
- "Increasing demand for product is creating supply and sourcing challenges." (Food, Beverage & Tobacco Products)
- "Steel bars required for automotive applications are in high demand. Supply is very tight and prices are increasing." (Fabricated Metal Products)
- "Aviation is recovering and outlook is optimistic." (Transportation Equipment)
- "The improving gas prices are positively impacting our short term drilling plans." (Petroleum & Coal Products)
- "Political issues in Russia are not yet impacting our supply of raw materials from Russian suppliers." (Computer & Electronic Products)
- "Volumes picking up in some sectors, but profitability still elusive. Suppliers indicate similar difficulties in getting price increases." (Chemical Products)
- "Business has remained steady. However, this month has a more subdued disposition by comparison. Price escalation has leveled off with even a few decreases on selected items." (Wood Products)
- "Semiconductor, oil & gas are very busy." (Electrical Equipment, Appliances & Components)
- "Business slightly up as anticipated; holding." (Machinery)
- "Defense industry contracts are shrinking, customer is exercising minimum options, or less than minimum." (Miscellaneous Manufacturing)
Finally, the commodities up in price - pretty much most of them:
- Aluminum (4);
- Aluminum Products;
- Ammonia;
- Beef;
- Butter (2);
- Copper;
- Electronic Components;
- Foam;
- Integrated Circuits;
- Lumber (3);
- MRO Supplies;
- Natural Gas;
- Nickel (3);
- Packaging Materials;
- Plastic Resins (6);
- Rice;
- Stainless Steel (3);
- Steel (6);
- Steel — Cold Rolled (2);
- Steel — Hot Rolled (2);
- Sulfuric Acid;
- Wood Pallets (2).
Source: ISM
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Something is wrong with the S&P SPY. It's not green.
BTD now. This is about as much as it's allowed to drop without buyers jumping in afraid of missing out.
Sum Ting Wong!
Manufacturing PMI Jump
Manufacturing ISM Dump
Sofa King Confucius!
BRUTAL COLD WINTER caused by GLOBAL WARMING........
Doesn't GLOBAL mean ALL OVER THE WORLD?
IF it's getting WARMER ALL OVER THE WORLD, then WHY was it BRUTALLY COLD over 95% of N .America last winter?
It was 51 degrees here on Delmarva last night fer christ sakes....global warming my ass....
It's called "Climate Disruption" now so it's correct no matter if too hot or too cold.
There'll be Glaciers in Manhattan Once Again - sounds like a lovely song, dear.
The underlying problem with global warming forecasts is it assumes steady solar input. Greenhouse gases cannot warm themselves. If solar output declines, everyone is fucked. We are due for a long cooling trend into the next iceage. People should be happy with warming climate..translates to longer growing season. Cooling cycle would devastate global population ( biologically speaking is needed).
This is a worst case date day, plus there is no way to stop the fed taper, how could they pump this garbage market based on a horrible outlook in every way?? It should be a big down day, but we will see if there is even a trace left of a real market haha
Quick! Start the pre-market ramp now!
Shit too late!!
When it is the other green you BTFD, it only happens a few times a month and is free money.
Stocks drop despite upbeat economic data. -WSJ
What they really mean is...
Stocks drop despite spin! WTF!
WSJ
But are above 50, so we are expanding. Fucking amazing!!!
And GDP hit the skids in Q1. It's the new math folks and it goes like this:
Q: What's 2 plus 2? A: What would you like it to be?
IF "both parties are the same", why did we not have this new math under Bush?
Cowardly liberTARDian down arrowers never answer the question!
That's how confident they are of their idiotic claims......
Stocks up, good news.
Stocks down, good news! BTD before next rally!
Rinse and repeat...
They can't even beat the manipulated lower expectations.
Data doesn't matter people. If data mattered, we'd be at 1200/12,000. The Dow finishes green unless WWIII starts today.
They just need to work out how this is good news before they can justify another green day
Now time to switch the blame on 'the unseasonably hot summer weather' keeping the connedsumers from spendin.
El Nino!
La Nina
Stagflation Obama style.
Joseph A. LaVorgna is the gift that keeps on giving.
and tell me these numbers have been made up? they can't hide the facts much longer?
Joey Baloney....LOL what a douchebag!
"The improving gas prices are positively impacting our short term drilling plans." For the rest of everybody that manufactures or produces anything, or drives, or eats not so good.
lol Lavorgnanomics...Does that fit somewhere between "bone throwing" and "fortune telling"?
Almost green! Bullish!
Several are claiming the seasonal adjustment used was Aprils and not Mays. I sure would like to see the not seasonally adjusted numbers.
UPDATE...now corrected to 56....
Score one for Joe... ha ha ha...
How embarrasing for the institute of Supply Management... to get a call from the Fed saying they used the wrong seasonal adjustment...
National Association of Purchasing Management, NAPM, seemed to be more believable - then it became the ISM....Ist Slammerjammer Munchkins.
Tomorrow's Headline: "We've Always Been At War With EastAsia".