Construction spending came in at +1.2% versus expectations of 0.3-0.4% so a positive there (although previous month revised down). As for ISM Manufacturing the trend continues to improve – this is the best reading since June at 53.9. That beat expectations of 53.2 and a solid jump over November's reading.
New order rose at fastest rate in 8 months at 57.6. Employment the best in 6 months at 55.1. Prices even fell – so all the major subindexes went in the 'right' direction.
(On a side note – there is a report on the BLS website showing U.S. manufacturing labor force wages are now below those of Australia, Canada, and 11 European countries – we're winning the race to the bottom. As I wrote this weekend, it's not just quantity of jobs but quality.)
Full report from ISM here.
"The PMI registered 53.9 percent, an increase of 1.2 percentage points from November's reading of 52.7 percent, indicating expansion in the manufacturing sector for the 29th consecutive month. The New Orders Index increased 0.9 percentage point from November to 57.6 percent, reflecting the third consecutive month of growth after three months of contraction. Prices of raw materials continued to decrease for the third consecutive month, with the Prices Index registering 47.5 percent, which is 2.5 percentage points higher than the November reading of 45 percent. Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month's survey."
WHAT RESPONDENTS ARE SAYING …
- "Slow Q4 — lots of destocking and inventory reduction going on." (Chemical Products)
- "Business seems strong, but likely due to tax advantages of purchasing capital expense items." (Machinery)
- "Our business is stable with a very good outlook for 2012." (Miscellaneous Manufacturing)
- "Food prices seem to have peaked as demand is starting to wane." (Food, Beverage & Tobacco Products)
- "All auto demand remains strong." (Fabricated Metal Products)
- "Continued conservative hiring, with tight discretionary spending controls due to slower growth expectations for 2012, driven by Euro zone sovereign debt concerns and lack of viable U.S. legislative process through the 2012 election." (Computer & Electronic Products)
- "Business beginning to slow down (seasonal), but will finish with a very strong year." (Plastics & Rubber Products)
- "Business is steady today around the world." (Transportation Equipment)
- "Market has definitely slowed in the last month, and is expected to remain so this month." (Wood Products)
|MANUFACTURING AT A GLANCE
|Customers' Inventories||42.5||50.0||-7.5||Too Low||From Unchanged||1|
|Backlog of Orders||48.0||45.0||+3.0||Contracting||Slower||7|
*Number of months moving in current direction.
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