The ISM manufacturing index increased 1.3 to 49.5, which is still a contraction. However, the internals were hopeful. New orders were 51.5; production increased 2.6 to 52.8 and employment rose 2.6 to 48.5. But new export orders decreased. The anecdotal comments provided the best news:
“Low oil prices and reduced activity continue affecting our business.” (Petroleum & Coal Products)
“U.S. business demand is solid; international demand is soft.” (Chemical Products)
“Mobility spend is up.” (Computer & Electronic Products)
“Business has to get better. And it appears it is. Healthy backlog for 2016.” (Fabricated Metal Products)
“Very strong demand for product. Material availability very good and commodity pricing continues to be depressed.” (Machinery)
“Airlines are still ordering planes and spare parts for plane galleys.”(Transportation Equipment)
“Market is beginning to trend up with spring season on its way.” (Wood Products)
“Not seeing impact from global economic volatility or oil prices. Business is strong and growth projections remain the same.” (Miscellaneous Manufacturing)
“Orders are coming in stronger than expected.” (Furniture & Related Products)
“Still a bit sluggish.” (Food, Beverage & Tobacco Products)
With the exception of comments related to the oil market and a few points about international softness, the comments are positive. Hopefully, this will translate to a reading above 50 in the next few months.
The service sector is still increasing; the ISM services number decreased .1 to 53.4. The report contained mixed internals. While the 3.9 point jump in production and 8 point increase in new orders were positive, employment slid into negative territory with a 49.7 reading. In contrast with the manufacturing report, the anecdotal comments were a bit more mixed:
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