View previous ISM related posts
View original ISM manufacturing report
Observations from the report
- Growing concerns over bankruptcies within the oil & gas sector
- Computer and electronic products rolling out vast wireless projects
- Employment component is at its lowest since June 2009
- New Orders component, which recently contracted, expanded by 51.5
Focus will now shift to the non-manufacturing read on Thursday. The chart above shows the manufacturing and non-manufacturing (NMI) reads, with the differential between them. It clearly shows the manufacturing sector is the drag but it also needs to be considered that NMI accounts for a larger portion of US growth and continues to expand. Technically however both have exhibited a top in Q3 '15 and recent data shows NMI following manufacturing down. So this will be a key relationship I'll be monitoring this year to see if the NMI contracts and weights down on GDP which, in turn, could see the FED reverse their rate direction and talk of QE4 will be on the radar (and lower USD).
US manufacturing contracts for a fourth month
Yet more weak data for the FED overnight to mull over, which saw the manufacturing sector decline for a fourth straight month with the employment index at its lowest since June 2009.