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ISM manufacturing activity slumps in November: ISM

The U.S. manufacturing sector contracted in November, falling to its worst levels since June 2009, when the economy was still in the midst of a recession, according to an industry report released on Tuesday.

The Institute for Supply Management (ISM) said its index of national factory activity fell to 48.6, the first time the index has been below 50 since November 2012, after reading 50.1 in October. The reading was for expectations of 50.5, according to a Reuters poll of 77 economists.

A reading below 50 indicates contraction in the manufacturing sector; the ISM data is often viewed as a precursor to movement in the overall economy, though its contribution to U.S. economic activity has been in decline for decades. The ISM index fell below 50 in 2012 briefly, but the economy did not go into recession.

Why is no one talking about a recession?

Why is no one talking about a recession?

OPTION TRADING PARTNERS Financial News – Option Trading Partners Network 

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Why is no one talking about a recession?

recession?

Option Trading Partners– It’s an odd conspiracy of silence. There were signs the economy was slowing in data for the end of the fourth quarter, and it’s looking far, far worse this quarter. Wednesday brought the latest trio of bad data. ADP said it had the…

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U.S. Factories Revving Up, in Divergence From Global Rivals

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While foreign manufacturers hunker down, U.S. factories are revving up. The Institute for Supply Management said Monday that its main gauge of the factory sector climbed to 59.0 in October from 56.6 in September. The improvement sent the index back to its August level, which was the highest since March 2011. A reading above 50 indicates expanding activity. American manufacturers reported an acceleration in new orders last month, while production edged up to its highest level since May 2004. The numbers suggest the U.S. economy is growing at above a 3% annualized rate at the start of the fourth quarter after a 3.5% gain in the third quarter.

“Business is fantastic,” said

Rick Cope,

chief executive of NanoLumens Inc., a privately held firm in Norcross, Ga., that makes large video displays found on the walls of stores, casinos and public spaces. Mr. Cope said about half of his firm’s business is international, and so far customers are taking a long view about upgrading their facilities rather than worrying about short-run global issues. “Companies still have to worry how to attract customers a year from now,” said Mr. Cope, whose firm employs about 100 workers. “Manufacturing is firing on all cylinders” in the U.S., said Bradley Holcomb, who oversees the group’s manufacturing gauge.

Market Talk Petroleum Industry a Wallflower at ISM’s Upbeat Party Today’s ISM report brought unexpected upbeat news about US manufacturing, but one industry is missing out on the party: makers of petroleum and coal products. Those manufacturers were the only industry to report a contraction last month, says the ISM, and they also reported falling employment and shrinking inventories. While comments didn’t address the reason, Bradley Holcomb who oversees the ISM survey says falling energy prices are probably contributing to the weakness. - Kathleen Madigan Market Talk is a stream of real-time news and market analysis that is available on Dow Jones Newswires

Indeed, the ISM report, based on a survey of purchasing managers, showed U.S. factories outperforming many of their overseas competitors. China’s two factory readings were just above 50 last month, barely in expansion territory, according to other surveys released in recent days. The eurozone purchasing managers’ index was also slightly expansionary, but the readings for France and Italy showed contracting activity. The U.K. measure was one of the few indexes that, like the U.S. measure, gained steam in October. Economists warn the global slowdown will eventually catch up to U.S. producers. The ISM survey includes one sign of that. Economists have begun to compare the ISM indexes on new orders and on exports orders to gauge the difference between U.S. and global growth. The bigger the gap, the better the U.S. economy is doing versus the world. In October, the gap was the largest since the ISM started tracking exports in 1988. For now, the ISM report showed that U.S. exports were still rising early this quarter, though the pace of growth eased in October to the slowest since April 2013. That’s “consistent with uneven growth in Europe and developing markets,” said Moody’s Analytics economist Kyle Hillman.

David Davis,

president of Simmons Machine Tool Corp. in Albany, N.Y., said business is “excellent” right now for the firm’s machine tools, which are used for railcar wheel-set maintenance. But he’s “a bit scared about the global slowdown.” Demand in Russia already has tapered off because of the uncertainty caused by sanctions. Mr. Davis worries slower global growth will reduce demand for commodities such as iron ore that are shipped by rail. Less rail traffic means fewer rail wheels to service, he said. Write to Kathleen Madigan at kathleen.madigan@wsj.com


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U.S. Factories Revving Up, in Divergence From Global Rivals

image

While foreign manufacturers hunker down, U.S. factories are revving up. The Institute for Supply Management said Monday that its main gauge of the factory sector climbed to 59.0 in October from 56.6 in September. The improvement sent the index back to its August level, which was the highest…

US Märkte: Achtung vor dem ISM Dienstleistungsindex

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Das Institute for Supply Management (ISM) schickt uns ab 16 Uhr neue Daten zum US Dienstleistungsindex, also zur Lage im nicht verarbeitenden Gewerbe. Seit März verzeichnet der Indikator dort eine ansteigende Tendenz. Jetzt scheint jedoch der Peak erreicht und ein weitere Anstieg sollte nu…
http://hanseatic-brokerhouse.de/us-maerkte-achtung-vor-dem-ism-dienstleistungsindex/

US ISM Feb. non-manufacturing at 51.6 vs. 53.5 estimate

US ISM Feb. non-manufacturing at 51.6 vs. 53.5 estimate

US

ISM Feb. non-

manufacturing

at 51.6 vs. 53.5 estimate

NEWSCANADA-PLUS                                    BUSINESS  NEWS  – 

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The U.S. Institute for Supply Management’s February non-manufacturing index came in at 51.6. Economists had expected a reading of 53.5, down from January’s 54.0. A reading above 50.0 indicates expansion in the sector.

Read more:  http://www.cnbc.com/id/101468187

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ISM Manufacturing PMI Surges In October (DIA, SPY, QQQ, TLT, IWM)

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d. moore photoThe latest manufacturing PMI from the Institute for Supply Management came in at 59.0.
Expectations were for the October reading to come in at 56.1, down from 56.6 in September.
The prices paid index fell to 53.5 from 59.5 last month, more than expectations for that index to fall to 58.0.
The ISM PMI report also comes after the latest US manufacturing PMI from Markit Economics showed manufacturing activity slowing to its lowest since July. 
So, overall, a mixed morning for US manufacturing reports. 
From ISM, here’s a quick snapshot of what some of the survey’s respondents had to say this month. 
ISM


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U.S. Factories Revving Up, in Divergence From Global Rivals

image

While foreign manufacturers hunker down, U.S. factories are revving up. The Institute for Supply Management said Monday that its main gauge of the factory sector climbed to 59.0 in October from 56.6 in September. The improvement sent the index back to its August level, which was the highest…

General Electric Industry Analysis

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 As an Industrial Conglomerate, GE has operations in many industries. It operates in the Energy Infrastructure, Aviation, Healthcare, Home & Business Solutions, Transportation and Financial Services Industry. Since GE has operations in every major industry it is also considered a bellwether for the American economy. In 2012, Industrial Conglomerates earned $1.04 trillion globally, growing at a pace of 3.28% year-over-year. The Institute for Supply Management (ISM) releases its Purchasing Managers’ Index and New Orders Index which are leading indicators for the performance of industrial conglomerates. Read More: GE

Feb. ISM at 53.2 vs. 52.0 est.; Jan. construction spending up 0.1% vs. down 0.3% est.

Feb. ISM at 53.2 vs. 52.0 est.; Jan. construction spending up 0.1% vs. down 0.3% est.

Feb. ISM at 53.2 vs. 52.0 est.; Jan. construction spending up 0.1% vs. down 0.3% est.

NEWSCANADA-PLUS                               BUSINESS  NEWS  – 

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The Institute of Supply Management‘s February manufacturing index came in at 53.2, while January construction spending in the U.S. was up 0.1 percent. Economists polled by Reutershad expected the ISM index to tick up to 52.0. Meanwhile,…

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We just got terrible news about the most important part of the US economy

(John Grees/Reuters)
The services sector is slowing down.

Even as the manufacturing sector fell into a recession and remained there for much of 2015, the services sector — which makes up two-thirds of economic activity — held up in expansionary territory.

It, too, however, is now seeing reduced growth.

Two key readings on January activity in the services sector, which contains industries as varied as medicine, law, and journalism, were released Wednesday.

In short, they were not good:

  • Markit’s services purchasing manager’s index (PMI) missed forecasts, at 53.2, the lowest level in 27 months (expected at 53.7 by economists).
  • The Institute of Supply Management’s non-manufacturing composite index came in at 53.5 (55.1 estimated), the lowest since March 2014, and showed that the services sector grew at a slower rate.

Still, both indexes are above 50, the border between expansion and contraction.

One of the big economic themes of 2015 entering 2016 was that as manufacturing started to roll over, the services sector held up, as you can see in the chart below.

But Wednesday’s data shows that this may be changing.

(FRED)

In a note after the report, TD Securities’ Gennadiy Goldberg wrote to clients (emphasis added):

The ISM non-manufacturing sector report’s outperformance of its manufacturing counterpart has recently been a key sign suggesting that US economic growth momentum has been weathering both domestic and global headwinds. Nevertheless, the ISM services sector gauge trimming its recent outperformance may go a long way in fanning fears of a more pronounced slowdown to US growth momentum heading into 2016.

Wednesday’s report from Markit showed that new work increased at a slower pace in January, though employment grew.

Chris Williamson, Markit’s chief economist, noted, however, that backlogs of uncompleted work had been declining in recent months, suggesting that there would be less need for additional hiring unless demand picks up. (The labor market, we’d note, has been the most robust part of the economy over the past few years.)

Here’s a chart that shows the recent slowdown in services, via Markit:

(Markit Economics)
ISM’s index of new export orders contracted 8 points to 53.5, with services producers now pointing to the same things that caused the manufacturing recession, including low oil prices:

“We continue to see record low key commodity prices driving product cost down,” a wholesale trade respondent said in ISM’s survey.

“Record low oil prices are putting extreme pressure on exchange rates for key export markets Canada and Mexico. Falling prices [are] pushing margins down as many are forced to drop prices to meet the competition. Extreme weather conditions this season are adding additional challenge[s] to both retail and wholesale sales volume regionally.”

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