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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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Mon, 06/02/2014 - 10:09 | 4816629 flacon
flacon's picture

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

Mon, 06/02/2014 - 10:14 | 4816654 HaroldWang
HaroldWang's picture

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

Mon, 06/02/2014 - 10:18 | 4816677 Headbanger
Headbanger's picture

Sum Ting Wong!

Manufacturing PMI Jump

Manufacturing ISM Dump

 

Sofa King Confucius!

Mon, 06/02/2014 - 10:25 | 4816692 RevRex
RevRex's picture

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....

Mon, 06/02/2014 - 10:30 | 4816711 Headbanger
Headbanger's picture

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

Mon, 06/02/2014 - 10:47 | 4816749 Dumpster Fire
Dumpster Fire's picture

 

 

 

the outlook remains bright -  LaVorgna

 

Mon, 06/02/2014 - 13:48 | 4817405 dontgoforit
dontgoforit's picture

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

Mon, 06/02/2014 - 10:51 | 4816751 papaswamp
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).

Mon, 06/02/2014 - 10:29 | 4816708 MountainsRoam
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

Mon, 06/02/2014 - 10:32 | 4816658 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Quick! Start the pre-market ramp now!

Shit too late!!

Mon, 06/02/2014 - 10:30 | 4816710 TheRideNeverEnds
TheRideNeverEnds's picture

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

Mon, 06/02/2014 - 10:13 | 4816647 ilovemilken
ilovemilken's picture

Stocks drop despite upbeat economic data.  -WSJ

Mon, 06/02/2014 - 10:15 | 4816663 Eyeroller
Eyeroller's picture

What they really mean is...

Stocks drop despite spin!  WTF!

WSJ

Mon, 06/02/2014 - 10:13 | 4816652 orangegeek
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?

Mon, 06/02/2014 - 10:26 | 4816699 RevRex
RevRex's picture

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

 

 

 

Mon, 06/02/2014 - 11:33 | 4816882 RevRex
RevRex's picture

Cowardly liberTARDian down arrowers never answer the question!

 

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

Mon, 06/02/2014 - 10:14 | 4816653 Eyeroller
Eyeroller's picture

Stocks up, good news.

Stocks down, good news! BTD before next rally!

Rinse and repeat...

Mon, 06/02/2014 - 10:15 | 4816660 Seasmoke
Seasmoke's picture

They can't even beat the manipulated lower expectations. 

Mon, 06/02/2014 - 10:16 | 4816666 Ness.
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.  

Mon, 06/02/2014 - 10:16 | 4816667 NoIdea
NoIdea's picture

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

Mon, 06/02/2014 - 10:16 | 4816668 SheepDog-One
SheepDog-One's picture

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

Mon, 06/02/2014 - 10:17 | 4816673 SoilMyselfRotten
SoilMyselfRotten's picture

El Nino!

Mon, 06/02/2014 - 13:44 | 4817395 dontgoforit
dontgoforit's picture

La Nina

Mon, 06/02/2014 - 10:20 | 4816684 Everybodys All ...
Everybodys All American's picture

Stagflation Obama style.

Mon, 06/02/2014 - 10:24 | 4816695 drchris
drchris's picture

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

Mon, 06/02/2014 - 10:28 | 4816701 oklaboy
oklaboy's picture

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

Mon, 06/02/2014 - 10:44 | 4816737 SheepDog-One
SheepDog-One's picture

Joey Baloney....LOL what a douchebag!

Mon, 06/02/2014 - 10:56 | 4816775 nakki
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.

Mon, 06/02/2014 - 11:01 | 4816788 Yen Cross
Yen Cross's picture

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

Mon, 06/02/2014 - 11:07 | 4816804 valley chick
valley chick's picture

Almost green!  Bullish!

Mon, 06/02/2014 - 11:35 | 4816855 papaswamp
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.

UPDATE...now corrected to 56....

Mon, 06/02/2014 - 11:40 | 4816914 Batfish
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...  

 

Mon, 06/02/2014 - 13:46 | 4817401 dontgoforit
dontgoforit's picture

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

Mon, 06/02/2014 - 12:25 | 4817082 BudFox2012
BudFox2012's picture

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

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