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ISM Manufacturing Tumbles To One-Year Lows As New Orders Crater; Construction Spending Disappoints

Amid a plunge in new orders to Jan 2014 lows, the ISM Manufacturing index slid to 53.5 (missing expectations of 54.5) to its lowest since Jan 2014 - confirming Markit's US PMI. New export orders contracted. employment growth slumped to 7 month lows, and inventories surged. In addition, after December's tumble in construction spending, January's bounce was only half as much as expedcted (+0.4% MoM vs +0.7% expected) missing for the 6th month in the last 7.

ISM Manufacturing hits one-year low.

 

As we had warned previously on several occasions, looking at the seasonally adjusted ISM is wrong. Here's why: finally the Adjusted data has caught up with unadjusted.

Here is what cherrypicked responses the ISM selected for the January release:

  • "Strong customer demand for our products continues to grow." (Food, Beverage & Tobacco Products)
  • "Customers are presenting many new opportunities." (Fabricated Metal Products)
  • "Consumer demand remains strong for automotive. Seeking alternatives to maximize production with existing production capacity." (Transportation Equipment)
  • "Chinese New Year, West Coast port dock slowdowns, coupled with railroad embargo are all creating logistical challenges and increased backlog of orders." (Wood Products)
  • "Sales have stayed very strong even with the dip in oil prices." (Computer & Electronic Products)
  • "Dock problems in California continue to delay shipment out of the West Coast. Most material prices are the same except resin prices are down." (Chemical Products)
  • "Business conditions are good, stable to improving." (Miscellaneous Manufacturing)
  • "West Coast port slowdown is getting serious. Mill has 40+ days of production at the ports and various warehouses." (Paper Products)
  • "Agriculture equipment production remains weaker than previous year as farm commodity prices remain low." (Machinery)
  • "Business in 2015 has started off on a fast pace. Very busy." (Primary Metals)

And elsewhere, the housing dead cat bounce is over confirmation came when construction spending missed for the 6th of last 7 months, and printed at just 0.4%, on expectations of a 0.7% jump.