Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  The ISM Manufacturing Index Increased to 47.6 in August
Posted Under: Data Watch • Inflation • ISM • Markets
Supporting Image for Blog Post

 

Implications:  Activity in the US factory sector contracted for the tenth month in a row in August, though at a slightly slower pace.  Looking at the details, only five of eighteen industries reported growth in August. Survey respondents noted slowing orders from customers across a wide range of industries and suggested that higher interest rates are beginning to impact demand as well.  We continue to believe a recession is lurking ahead and today’s report shows the goods sector of the economy is likely to lead the way.  Weakening demand was most easily seen in the new orders index, which fell to 46.8 in August.  Given that spending has been shifting away from goods and back toward services it’s not surprising that this measure has remained in contraction for the past year.  Meanwhile, the production index rebounded to 50.0 in August. With the combination of less demand from consumers and built-up inventories at retailers, we don’t expect this to turn into an upward trend.  However, fewer orders and faster production have allowed factories to catch up on order backlogs.  While that index did rise slightly in August, it remains near the lowest readings since the 2008 Financial Crisis.  That said, the slowdown in orders and reduction in backlogs has begun to affect the employment index, which remained in contraction for the third month in a row at 48.5 in August.  Finally, on the inflation front, the prices index rose to 48.4 in August.  In other news this morning, construction spending increased 0.7% in July.  The gain was driven by large increases in home building and manufacturing facilities, which more than offset declines in road construction and other transportation projects.

Click here for a PDF version

Posted on Friday, September 1, 2023 @ 12:03 PM • Post Link 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.
Follow First Trust:  
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 © 2024 All rights reserved.