Apr ISM was, you guessed it, less bad, coming in at 40.1 up from 36.3 in
Mar and vs estimates of 38.4. It’s the highest level since the Sept
reading of 43.4 but is still of course 10 pts below the 50 level and as
ISM said “while this is a big step forward, there is still a large gap
that must be closed before mfr’g begins to grow again.” New Orders rose
6 pts to 47.2, Backlogs rose 5 pts to 40.5 and Inventories remained
lean, rising a touch to a still low 33.6 at the mfr’g level and falling
4.5 pts at the customer level. Employment rose 6.3 pts to 34.4 but still
well below 50. Export Orders bounced 5 pts to 44, the highest since
Sept. Prices Paid rose just 1 pt but to the highest since Oct. Net-net,
there is a high correlation to the sharp fall in inventory levels and
the increases seen in new orders. The question for the economy is what
happens after inventories are refilled, will the end demand be there to
sustain the mfr’g rebound.

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