ISM Manufacturing Tumbles - The Weather Bounce Is Over

Tyler Durden's picture

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:

And this:

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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flacon's picture

Something is wrong with the S&P SPY. It's not green. 

HaroldWang's picture

BTD now. This is about as much as it's allowed to drop without buyers jumping in afraid of missing out.

Headbanger's picture

Sum Ting Wong!

Manufacturing PMI Jump

Manufacturing ISM Dump


Sofa King Confucius!

RevRex's picture






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 warming my ass....

Headbanger's picture

It's called "Climate Disruption" now so it's correct no matter if too hot or too cold.

Dumpster Fire's picture




the outlook remains bright -  LaVorgna


dontgoforit's picture

There'll be Glaciers in Manhattan Once Again - sounds like a lovely song, dear.

papaswamp's picture

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).

MountainsRoam's picture

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

_ConanTheLibertarian_'s picture

Quick! Start the pre-market ramp now!

Shit too late!!

TheRideNeverEnds's picture

When it is the other green you BTFD, it only happens a few times a month and is free money.  

ilovemilken's picture

Stocks drop despite upbeat economic data.  -WSJ

Eyeroller's picture

What they really mean is...

Stocks drop despite spin!  WTF!


orangegeek's picture

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?

RevRex's picture

IF "both parties are the same", why did we not have this new math under Bush?




RevRex's picture

Cowardly liberTARDian down arrowers never answer the question!


That's how confident they are of their idiotic claims......

Eyeroller's picture

Stocks up, good news.

Stocks down, good news! BTD before next rally!

Rinse and repeat...

Seasmoke's picture

They can't even beat the manipulated lower expectations. 

Ness.'s picture

Data doesn't matter people.  If data mattered, we'd be at 1200/12,000.  The Dow finishes green unless WWIII starts today.  

NoIdea's picture

They just need to work out how this is good news before they can justify another green day

SheepDog-One's picture

Now time to switch the blame on 'the unseasonably hot summer weather' keeping the connedsumers from spendin.

Everybodys All American's picture

Stagflation Obama style.

drchris's picture

Joseph A. LaVorgna is the gift that keeps on giving. 

oklaboy's picture

and tell me these numbers have been made up? they can't hide the facts much longer?

SheepDog-One's picture

Joey Baloney....LOL what a douchebag!

nakki's picture

"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.

Yen Cross's picture

    lol Lavorgnanomics...Does that fit somewhere between "bone throwing" and "fortune telling"?

valley chick's picture

Almost green!  Bullish!

papaswamp's picture

Several are claiming the seasonal adjustment used was Aprils and not Mays. I sure would like to see the not seasonally adjusted numbers. corrected to 56....

Batfish's picture

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...  


dontgoforit's picture

National Association of Purchasing Management, NAPM, seemed to be more believable - then it became the ISM....Ist Slammerjammer Munchkins.

BudFox2012's picture

Tomorrow's Headline: "We've Always Been At War With EastAsia".