Manufacturing Reprieve: 11-Month High Still Pretty Low for ISM

Source: Economics Group of Wells Fargo Bank, N.A. Summary Manufacturing activity contracted at the slowest pace in nearly a year according to the September ISM. Recent data signal some relief in the sector, while higher oil prices point to potential upside risk ahead. Some Reprieve in Manufacturing The recent read on the manufacturing sector is that activity is seeing somewhat of a reprieve though it remains weak. This is the message from today’s ISM. The overall manufacturing index rose for the third straight month, but at 49.0 in September still signals activity is contracting—even if it’s at a slower pace (chart). That said, even though 50 marks the traditional threshold for economic expansion, for manufacturing any reading above 48.7 is typically associated with expansion. Most of the underlying measures moved in the right direction. Production and new orders pushed higher, with current production in expansion territory (52.5) for the second consecutive month (chart). New orders remained in contraction, but at 49.2 the index reached the highest in just over a year. READ FULL ARTICLE >>