SIJ - Soft U.S. Manufacturing And Construction Numbers Emphasise The Dependency On Services

2024-07-01 13:45:00 ET

Summary

• Monday’s data highlights how dependent the US economy is on the ongoing strength in consumer demand for services.
• Today's US data has come in on the softer side of expectations with the June ISM manufacturing index dipping to 48.5 from 48.7.
• The details show production dropped to 48.5 from 50.2 (6M avg of 50.6), with new orders at 49.3 (6M average of 49.5).

By James Knightley

ISM components highlight the problems for US manufacturing

Today's US data has come in on the softer side of expectations, with the June ISM manufacturing index dipping to 48.5 from 48.7. The consensus was looking for a modest recovery to 49.1. This is the 19th sub-50 reading, thereby indicating contraction in the past 20 months, with only March breaking the trend with a 50.3 print. The chart below shows that the ISM indices used to be an excellent lead indicator for judging turning points in the economic cycle, but for now, the economy continues to perform strongly despite the apparent softness in the surveys....

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