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Friday, November 2, 2012

ISM manufacturing data

The ISM data was a bit above last month's and above 50 again.  Here is the chart.

The index is about the same level as the worst readings last year.  It was only a slight bump up from last month.  This could still be a bump in a down trend in the index.  I think we need to see what happens next month before we can say whether it is starting to show economic strength.

Here is the new orders index.

This index has made a great recovery since the summer.  The oddity with this data is that none of the regional surveys have shown a similar increase.  Last fall the regional data showed upticks in new orders that translated into an economic pickup.  I don't know exactly what to make of this discrepancy.   Is it possible there is a seasonal adjustment issue?  I would prefer the regional data confirm the uptick before declaring the economy is really picking up.

Here is the exports orders index.

This index is still contracting and is not showing the same uptick the new orders index has.  Notice that last fall it did pick up late in the year and confirm an uptick in the economy.  The global economy is still a drag.

Here is the employment index.

This index is still in expansion mode, but did turn down a little bit this month.  This is inconclusive at this time.  The increase in new orders did not increase hiring plans I guess.

Charts courtesy of YCharts

This next chart may be more telling then the new orders index.

This chart is the new orders less inventories.  We can see a slight uptick this month, but it is still at very low levels.  This is recession looking still.

The global economy is still being a drag on the U.S. economy.  The new orders have improved considerably, but there is not enough confirming evidence to say the economy is really on an uptick yet.  The regional data this month might give us a better reading on whether the new orders data is meaningful or not.


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