Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  The ISM Manufacturing Index Declined to 57.3 in April
Posted Under: Data Watch • ISM


Implications: Manufacturing activity continued to hum along in April, though at a slightly slower pace than in March.  Most importantly, growth remains broad-based, with seventeen of eighteen industries reporting growth in April (no industries reported contraction), while the two most forward-looking indices - new orders and production – both remain at very healthy levels (remember, levels above 50 signal expansion, so these lower readings represent continued growth, just at a slower pace than in recent months).  In other words, the signs continue to point towards robust manufacturing activity in the months ahead.  The employment index declined to 54.2 from 57.3 in March, but other data on employment suggests April saw a pickup in the pace of hiring.  While our forecasts may change with ADP and initial claims data out later this week, we are currently forecasting employment growth of around 184,000 non-farm jobs in April.  Prices, meanwhile, rose once again in April to a reading of 79.3, the highest since 2011.  A total of thirteen commodities were reported up in price, while one – soybean oil - showed declining costs.  Yet another sign (see yesterdays reported on the PCE price index) that inflation is picking up pace as economic growth accelerates, and a signal to the Fed that a total of four rate hikes in 2018 are not just appropriate, but warranted.  Look for a change in wording in tomorrow's Fed statement to signal that the Fed sees inflation accelerating above the target of 2%, while unemployment already stands below their estimate of the long-run average.  In sum, the manufacturing sector continues to show strength, even if the pace of growth slowed modestly in April.  In other news this morning, construction spending declined 1.7% in March (but was up 0.9% including upward revisions to prior months).  For March itself, a slowdown in home building and commercial facilities more than offset a pickup in spending on highways and streets.

Click here for PDF version

Posted on Tuesday, May 1, 2018 @ 11:18 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.