US manufacturing both declined (PMI) and rose (ISM) in October as the divergence between the two soft-survey-based data streams is as ridiculous as it was in the second half of last year. ISM printed a cycle high 59.0 (highest since March 2011) smashing the 56.1 expectations (the biggest beat since July 2013). While the headline print was exuberant, New orders fell, as did new export orders. Construction spending fell for the 2nd month in a row, dropping 0.4% against expectations of a 0.7% rise.
Doesn't seem like the US decoupling is taking hold domestically... 4th miss in a row for Construction spending and 2nd monthly drop.
- *CONSTRUCTION SPENDING IN U.S. DECLINES TO WEAKEST SINCE MARCH
- *U.S. SEPT. PUBLIC CONSTRUCTION SPENDING FALLS 1.3% FROM AUGUST
- *U.S. SEPT. PRIVATE NON-RESIDENTIAL CONSTRUCTION FALLS 0.6%
[3]
ISM beat by the most since July 2013 to cycle highs...
[4]
Makes sense...
[5]
It appears the ISM needs a better seasonal adjustment.
And speaking of seaosnal adjustments, because a "soft-data" survey apparently needs to be seasonally adjusted, here is what the all importnat New Orders ISM would look like with and without seasonal adjustments:
[6]
Yup: the unadjusted New Orders print is back at February 2014 levels.
Clearly what US manufacturing needs is yet another, a third, "impartial" survey of US manufacturing to serve as a tiebreaker to farcical states, such as now, when Markit says worse, ISM says better, and the "self-reported", cherrypicked, seasonally-adjusted respondents say the following:
- "Holiday orders are exceeding seasonal forecasts. Customers are demanding additional quantities above prior orders. Fuel costs and other positive signals appear to be creating demand above normal." (Food, Beverage & Tobacco Products)
- "Weakness in commodity prices very positive on our business." (Fabricated Metal Products)
- "We continue to see strong demand across multiple sectors." (Transportation Equipment)
- "Business steady and strong." (Furniture & Related Products)
- "Another strong month in terms of business growth." (Computer & Electronic Products)
- "Most business segments are seeing an upward trend in orders — mostly from existing customers, but also some new customers. Transportation continues to be a major issue." (Chemical Products)
- "Conditions are still basically flat." (Printing & Related Support Activities)
- "Production is oversupplying demand, and prices have softened." (Wood Products)
- "Outer body material changes in the auto industry means new equipment and manufacturing growth." (Machinery)
- "Business conditions are good; sales and production volumes are generally increasing." (Miscellaneous Manufacturing)
