Earlier today, the Institute for Supply Management reported that its index measuring the economy's manufacturing activity during June came in at a reading of 61.1, down from May's 62.8. The June result was in line with consensus expectations.
Remaining troublesome, however, was the index's price component, coming in at a reading of 81.0. Although this was down five points from an 86.0 reading in May, June's number remained high, considering how the results are scored overall. Readings above 50.0 indicate expansion.
In addition and per this measure, June was the 28th consecutive month of increasing prices. (As recently as last October, the price component stood at a much lower 58.5.)
ISM reported that 66% of its survey respondents reported higher prices during June, while 4% reported lower ones. The May results were 77% and 1%, respectively. Thus, the change in skew from late last year continues. In October 2003, for instance, the numbers were 26%/9%.
The following table examines the ISM prices data over the nine months ended June. So you can see how the numbers have been trending, data for March through June 2003 are also included.
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INSTITUTE FOR SUPPLY MANAGEMENT PMI INDEX
-- TOTAL INDEX AND PRICE COMPONENT
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Respondents Reporting
Higher, Lower, or
Unchanged Prices
Month/ Overall Price ---------------------
Year Index Index Higher Lower Unch.
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06/04 61.1 81.0 66% 4% 30%
05/04 62.8 86.0 74% 2% 24%
04/04 62.4 88.0 77% 1% 22%
03/04 62.5 86.0 73% 1% 26%
02/04 61.4 81.5 65% 2% 33%
01/04 63.6 75.5 54% 3% 43%
12/03 66.2 66.0 37% 5% 58%
11/03 62.8 64.0 33% 5% 62%
10/03 57.0 58.5 26% 9% 65%
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06/03 50.4 56.5 26% 13% 61%
05/03 50.0 51.5 21% 18% 61%
04/03 46.2 63.5 37% 10% 53%
03/03 46.6 70.0 47% 7% 46%
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Next Tuesday (7/6), ISM will report its index covering activity in the economy's non-manufacturing sector. In recent months, this measure's price component also has shown some disquieting results.
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