Chicago ISM PMI, Employment, Exports and New Orders All Contact as Trade War Bites

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  • #21803
    Helmholtz Watson
    Participant

    The US manufacturing sector via the regional Chicago…

    [article]1706[/article]

    #21827
    MoneyNeverSleeps
    Participant

    US July factory orders for July 1.4% v 1.0% estimate

    Prior month 0.5% versus 0.6%
    Ex transportation: 0.3% versus -0.1% last month (revised from +0.1%)

    It was the biggest gain in industrial orders since August of 2018, as transport orders rose the most in eleven months (7% vs 4.1% in June).

    Orders advanced for civilian aircraft and parts (47.8% vs 101.4%); computers and electronic products (0.4% vs -1.5%) and electrical equipment, appliances and components (0.5% vs 0.7%) while machinery orders fell (-0.8% vs 1.7%).

    Capital goods orders non-defense ex air: +0.2% versus 0.4% preliminary
    Capital goods shipments non-defense ex air: -0.6% versus -0.7% preliminary

    Orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, went up 0.2% in July, after a downwardly revised 0.9% advance in the prior month.

    Shipments for manufactured products decreased 0.2%, down from a 0.1% increase in the prior month.

    Factory Orders in the United States averaged 0.27 percent from 1991 until 2019, reaching an all time high of 10.40 percent in July of 2014 and a record low of -9.70 percent in August of 2014.

    #21828
    MoneyNeverSleeps
    Participant

    Durable goods orders July Final: 2.0% versus 2.1% estimate (and 2.1% preliminary)
    Durable goods ex transportation: -0.4% versus -0.4% estimate (same as preliminary)

    #21929
    TradersCom
    Keymaster

    US August industrial production +0.6% s +0.2% expected
    Prior -0.2% revised to -0.1%

    Industrial Production year-on-year at 0.4%

    Capacity utilization 77.9% v 77.6% expected
    Manufacturing production +0.5% v +0.2% expected

    #21982
    Truman
    Participant

    Richmond Fed Manufacturing Index for September -9 v. 1 estimate

    The composite index dropped from 1 in August to −9 in September, as both shipments and new orders fell. However, the third component, employment, rose. Firms also reported a drop in backlog of orders and weakening local business conditions but were optimistic that conditions would improve in the coming months.

    Survey results indicated wage growth and a slight increase in employment in the manufacturing sector in September. However, firms struggled to find workers with the necessary skills, and the indicator for the average workweek hit a nine-year-low. Manufacturers expected wages and employment to continue to grow but finding workers to continue to be a struggle in the next six months.

    Growth of prices paid by survey respondents held fairly steady in September, while the growth rate of prices received increased, narrowing the gap between the two. Firms expected growth of both prices paid and prices received to slow in the near future.

    #22027
    TradersCom
    Keymaster

    [size=5][color=red][b]US September ISM manufacturing index 10-year low 47.8 v 50.0 expected
    Prior 49.1[/b][/color][/size]

    Employment 46.3 vs 47.7 prior
    Prices paid 49.7 vs 46.0
    New orders 47.3 vs 47.2

    Only 17% of industries reported overall growth

    Comments in the report:

    “Second month in a row in which shipments have outpaced new orders.” (Computer & Electronic Products)
    “Continued softening in the global automotive market. Trade-war impacts also have localized effects, particularly in select export markets. Seeing warehouses filling again after what appeared to be a short reduction of demand.” (Chemical Products)
    “Business outlook remains cautious. Orders seem to be decreasing, but luckily not as sharp of a decrease as we were expecting.” (Transportation Equipment)
    “Chinese tariffs going up are hurting our business. Most of the materials are not made in the U.S. and made only in China.” (Food, Beverage & Tobacco Products)
    “General market is slowing even more than a normal fourth-quarter slowdown.” (Fabricated Metal Products)
    “Demand softening on some product lines, backlogs have reduced, and dealer inventories are growing.” (Machinery)
    “Business has been flat for us. Year-over-year growth has slowed dramatically.” (Miscellaneous Manufacturing)
    “We have seen a reduction in sales orders and, therefore, a lower demand for products we order. We have also reduced our workforce by 10 percent.” (Plastics & Rubber Products)
    “Incoming sales are sluggish for this time of year.” (Furniture & Related Products)

    #22277
    TradersCom
    Keymaster

    [b][color=green][size=5]Flash U.S. Manufacturing PMI at 51.5 (51.1in September). 6-month high.
    Flash U.S. Manufacturing Output Index at 52.7 (51.8in September).6-month high
    Flash U.S. Manufacturing New orders 52.5 vs r (51.5 in September)
    [/size][/color][/b]
    “Despite business activity lifting from recent lows, the survey data point to annualized GDP growth of just under 1.5% at the start of the fourth quarter, and a near-stalling of new order growth to the lowest for a decade suggests that risks are tilted toward growth remaining below trend in coming months.

    “An increased rate of job culling adds to the gloomy picture, with jobs being lost among surveyed companies at a rate not seen since 2009. At current levels, the survey’s employment gauge indicates non-farm payroll growth slipping below 100,000.

    “The overall subdued picture reflects a spreading of economic weakness from manufacturing to services, but encouragingly we are now seeing some signs of manufacturing pulling out of its downturn,in part driven by a return to growth for exports and improved sentiment about the year ahead, linked to hopes that trade war tensions are starting to ease.

    “If manufacturing can continue to gain momentum this should hopefully feed through to stronger jobs growth and an improved service sector performance, leading to better GDP growth, but it remains too early to determine whether the economy has truly turned a corner.”

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