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 Declined to 56.6 in September
Posted Under: Data Watch • ISM
Supporting Image for Blog Post

 
Implications: The ISM index says the manufacturing sector was still growing at a robust rate in September, just not quite as fast as in August. The index, which measures factory sentiment around the U.S., came off its highest reading in three years to a still healthy 56.6 in September. Zigs and zags are to be expected and no one should see the report as a sign of economic weakness. Both the three and six month averages for the index are the highest in more than three years. According to the Institute for Supply Management, an overall index level of 56.6 is consistent with real GDP growth of 4.4% annually. While last week's GDP report came in at a strong 4.6% for Q2, the ISM report has tended to over-estimate real GDP growth in the past several years and we're projecting growth of around 3% for the rest of the year. On the inflation front, the prices paid index rose to 59.5 in September from 58.0 in August, a sign of overly loose monetary policy. In other news this morning, the ADP index, which measures private-sector payrolls, increased 213,000 in September. Plugging this into our models suggests an increase of 225,000 in both nonfarm and private payrolls in September, although this forecast may change slightly when we get jobless claims data tomorrow morning. In still other news, construction declined 0.8% in August and dropped 2.1% including downward revisions for prior months. The decline in August was led by power plants, home improvements (although new home construction was up), shopping centers, and classrooms at public colleges. On the housing front, the national Case-Shiller index, which measures home prices, increased 0.2% in July and is up 5.6% from a year ago. In the past year, price gains have been led by Las Vegas, Miami, and San Francisco. Prices should continue to rise in the year ahead, but not as fast as in the past two years. In other housing news earlier this week, pending home sales, which are contracts on existing homes, declined 1% in August after a 3.2% gain in July. Our model suggests existing home sales, which are counted at closing, should be up 2% in September to 5.15 million, which would be the fastest pace in a year. Overall, recent data show neither an economic boom or an impending recession, just more Plow Horse.

Click here for PDF version
Posted on Wednesday, October 1, 2014 @ 11:13 AM • 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.
Search Posts
 PREVIOUS POSTS
History Says: August Payrolls Will Be Revised, Up
Is Housing Healthier Than It Appears? Are Mortgage Lenders Loosening Up?
A Slight GOP Edge in the Mid-Terms
Personal income increased 0.3% in August
Real GDP Growth in Q2 was Revised to a 4.6% Annual Rate
New Orders for Durable Goods Fell 18.2% in August
New Single-Family Home Sales Boomed 18.0% in August
Existing Home Sales Declined 1.8% in August
Two Sides to Every Coin
Housing Starts Declined 14.4% in August
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.