US Manufacturing PMI fell back very modestly from its flash reading but rose MoM to 51.3 as Markit warns "producers are struggling in the face of the strong dollar, the energy sector decline and presidential election jitters." But, ISM Manufacturing surged full of hope to 53.2, above the highest analyst estimate (a 4 standard deviation beat of expectations). Every subcomponent rose aside from Prices Paid as it appears – as opposed to everything we have seen in earnings and chatter – that Brexit, election uncertainty has done nothing at all to dampen 'hope'. In the face of this seasionally-adjusted exuberance, construction spending has plunged almost 3% in the last 2 months – the biggest drop since Feb 2011.
Anothewr miracle of seasonal adjustment…
Sending Manufacturing ISM to 16 month highs…
ISM Components – all up but Prices Paid…
- New orders rose to 57 vs 55.7
- Employment rose to 50.4 vs 49.2
- Supplier deliveries rose to 55.4 vs 54.1
- Inventories rose to 48.5 vs 45.0
- Customer inventories rose to 51.0 vs 50.0
- Prices paid fell to 60.5 vs 63.5
- Backlog of orders rose to 52.5 vs 47.0
- New export orders rose to 53.5 vs 52.5
- Imports rose to 52.0 vs 50.0
Thanks to the miracle of seasonal-adjustments… New Orders worst since Feb but adjusted to best since March…
And respondents were decidedly mixed…
"We are gaining new customers through better sales management." (Food, Beverage & Tobacco Products)
"Slower shipments because of weather related flooding." (Chemical Products)
"Conditions have remained steady from [the] past month and are in line with our forecast." (Computer & Electronic Products)
"Very good start of summer for business levels/orders." (Fabricated Metal Products)
"Business is steady with some signs of increase." (Machinery)
"Business is still strong, but slowing slightly." (Transportation Equipment)
"Business conditions are good, production and demand are stable." (Miscellaneous Manufacturing)
"Orders are slowing from China. American customers still steady." (Primary Metals)
"Demand continues to be robust." (Plastics & Rubber Products)
"Business is still slower than expected." (Nonmetallic Mineral Products)
However, as Markit notes,
“Producers are struggling in the face of the strong dollar, the energy sector decline and presidential election jitters. With companies craving certainty, heightened tensions between the UK and the European Union are likely to unsettle the global business environment further in coming months, and therefore risk dampening growth in the US and export markets. The data flow in the next two months will therefore be critical to policymakers in gauging the appropriate outlook for interest rates.”
While that is all very exciting, it appears the construction industry just hit a wall…
via http://ift.tt/29xDBVg Tyler Durden