Feb ISM manufacturing was about in line with expectations at 61.4 vs 60.8 in Jan and the best level since May ’04. New Orders and Backlogs rose a touch. Mfr Inventories fell back below 50 for the 1st time since June and Customer Inventories fell 5.5 pts to 40, matching the lowest since July, and both well below New Orders. Employment rose almost 3 pts to the highest since 1973. Export Orders rose .5 pt to the most since 1988. Prices Paid rose .5 pt to 82, the highest since Aug ’08. Of 18 industries surveyed, 14 reported growth. The ISM had the following caveat to the strong headline figure, “there is also concern as industries related to housing continue to struggle and the Prices Index indicates significant inflation of raw material costs across many commodities.” Bernanke is focused on core consumer inflation but inflation is felt everywhere regardless and has an obvious impact on business decision making.
