As we hinted earlier, and contrary to 100% wrong whisper numbers, the January ISM [4]not only did not land in the 55+ ball park, but missed consensus estimates of 54.5, printing at 54.1, yet up from December's 53.1. However, just like in China, the goalseeked number was neither good nor bad, although leaning toward the weaker side to keep with the Chicago PM's miss. After all the Chairman needs an exit door for more QE.The internals were not very notable with the exception of Prices Paid, which came at 55.5 compared to expectations of 50.0 and up from 47.5 in December, the highest since September 2011. Oops margins and oops Inflation? And what is just as bad, the traditionally leading "New Orders less Inventories" index turned down once again, with Invs rising by +4.0, and New Orders up just 2.8%.
Breakdown:
[5]
And New Orders less Inventories courtesy of John Lohman:
[6]
What the respondents are saying:
- "Still seeing raw materials pricing moving down in general, but expect inflation later in the quarter." (Chemical Products)
- "Year starting a little slow, but customers are positive about increased business in 2012." (Machinery)
- "Once again, business continues to be strong." (Paper Products)
- "Pricing remains in check with the demand we are seeing. Supplier
deliveries are on time or early." (Food, Beverage & Tobacco
Products) - "The economy seems to be slowly improving." (Fabricated Metal Products)
- "Business lost to offshore is coming back." (Computer & Electronic Products)
- "Business remains strong. Order intake is great — more than 20 percent above budget." (Primary Metals)
- "Indications are that 2012 business environment will improve over 2011." (Transportation Equipment)
- "Market conditions appear to be improving, with the outlook for 2012 better yet." (Wood Products)