Um, no:
Perhaps the headline writer meant that the May reading of 49.6, as compared to the prior month’s reading of 48.6, was an improvement.
But anything below 50 represents a contraction — not a pick up in activity.
See also:
ISM Factory Index in U.S. Shrank Less Than Forecast (Bloomberg) http://www.bloomberg.com/apps/news?pid=20601087&sid=aggPD2WvFTw4&
ISM Mfg Index (Barron’s Econoday)
http://premium.econoday.com/reports/US/EN/New_York/napm/year/2008/yearly/06/index.html
Love that little blurb in the lower right corner entitled: “Dollar comeback.”
If they mean by “comeback” that a chicken whose head has been cut off may run around the yard a bit before it finally expires; then yeah…
The May ISM mfr’g # was about 1 pt higher than expected at 49.6 up from 48.6 but the 5th month out of the last 6 below 50. Prices Paid rose 2 pts to 87, just a hair below its highest level since 1979. New Orders rose about 3 pts but is still below 50 for a 6th month. Backlogs fell 5.5 pts to back below 50. The employment index was little changed and remaining below 50 at 45.5, .1 pts from its lowest level since June ’03. Export orders remained solid and was the lone bright spot, rising 2 pts to the highest since May ’04 and is keeping the ISM from falling to the low 40’s that it saw in the last recession but we know the US consumer is the center of this slowdown. According to ISM, “Mfr’s find themselves caught b/w rising costs and weakening demand in many industries…w/o the weak $ the story would be much more negative in mfr’g.”
You’d wish they get it right, but most of this is all about expectations. Consensus was looking for a more significant drop in the ISM so the 49.6 was “good” news
It’s more important what Kudlow, Westbury, Bowyer and Luskin say it is rather than what it really means…..they know what is truly happening
Was surprised CNBC.com didn’t trumpet it as positive.
BTW, Chinese manufacturing has also taken a pretty good hit recently. Don’t know how analogous to ours it is, but it has declined:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFd03n4uoPiw
becoming harder and harder to find real reasons (not the ones fostered upon by the media) for the drops in the markets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=atqA5Bpu.MEo&refer=home
hmmmm our balance sheet a little impaired is it?
that’s a tell if I ever saw one..
Ciao
MS
The new-orders index rose to 49.7% from 46.5% in April. This is the highest level since November.
The production index rose to 51.2% from 49.1% in April, the highest level since January.
The inventory index fell to 48.0% from 48.1%.
“A PMI in excess of 41.1 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates the overall economy is growing and the manufacturing sector is contracting at this time. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (49.2 percent) corresponds to a 2.5 percent increase in real gross domestic product (GDP). In addition, if the PMI for May (49.6 percent) is annualized, it corresponds to a 2.7 percent increase in real GDP annually.”
What’s not to like???
You all are missing out if you’re not watching Bloomberg. Those two intellectual giants, Steve Forbes and the guy from National City who was puzzled last week by why consumers were discouraged when all the numbers are so wonderful.
Sir, most of the virulent comments on this blog are directed to Bubblevision MSNBC. Their shilling cannot be duplicated by anyone, even Blooomberg. Don’t try it again. This is your only warning.
Another headline on Yahoo, Finance at Noon central time…”The Market is Declining due to Profitaking today after four straight days of advance”…well, boys and girls…the market was over 13000 as recently as May 19th…if this is profitaking then I may need to review the definition of profit…maybe this is just a systemic bad headline day…..
Bruce in Tennessee
Marketwatch headlines are systematically manipulated. There is often major contradiction between the headline and the actual text.
The journalists make the stories and the propaganda department the headlines.
I believe they refer to that as; creative journalism.
I’m convinced that Marketwatch moved a few headline writers from the NY Post to its own electronic pages about 3 months ago.
Start of 1973 recession ISM was near cycle high
In fact, the last time we saw energy shocks of this magnitude was back in the 1970s and early 1980s and the ISM was giving fairly similar signals to what we are seeing today – that the back end of the economy (ie. the manufacturing base) was doing ok. In November 1973 (the onset of a 16-month-long energy shock induced recession), the ISM was very close to its cycle high at 68.1. Not too long after that, the consumer rolled over, and what do you know, the ISM started to roll over as well, hitting a deep trough of 30.7 in March 75. Even in the early months of the 1980s recession, the ISM continued to tick higher and actually squeaked up above the 50-mark in February 1980 – one month after the official start of that downturn.