Summary
The Institute for Supply Management reported earlier today that its index designed to measure the economy's manufacturing activity came in at a reading of 54.8 in January, compared with December's revised 55.6. The index's price component rose 2.0 points in January, to 65.0.
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* ISM's report earlier today showed that its index designed to measure the economy's manufacturing activity ("PMI") fell in January, to 54.8. This compared with a revised December reading of 55.6.
(NOTE: With this report, ISM has incorporated a revised set of seasonal-adjustment factors from the Commerce Department. All past data discussed or shown in this missive are adjusted for these revisions.)
* In January of 2005, the PMI stood at 56.3, 1.5 points or 2.7% above January 2006.
* The January 2006 result was modestly below a consensus forecast that had been looking for something around December's level of 55.6.
(NOTE: Overall index and sub-index readings above 50.0 indicate expansion; readings below 50.0 indicate contraction.)
* The prices-paid component registered a 2-point gain during January, to 65.0, keeping this key area at a high level by historical standards. Including the January gain, this series stood 16.5 points or 34.0% above its recent low of 48.5, set last July.
* During January, three of the PMI's more important components weakened. These were new orders, production and employment. However, two of the three -- new orders and production -- remained relatively strong overall, with index readings of 58.0 and 56.6, respectively.
* Among the three components listed above, the weakening generating at least a little concern was in employment. Its 51.3 January reading was the lowest since last June's 50.4.
* Some comments from ISM's "What Respondents Are Saying" section of today's report:
- "Sales are still strong" (Chemicals).
- "November and December sales were robust, which helped in reducing inventory for the year end" (Fabricated Metals).
- "We experienced some softness in December sales. Reason unknown at this time" (Food).
- "The machine tool industry as a whole remains sluggish although there is more quoting activity and there are a few bright spots on the horizon" (Industrial & Commercial Equipment & Computers).
* Over the 12-month period ended January, the overall PMI registered a high of 58.1 (October 2005). Its low of 51.4 was set last May. The 12-month average came in at 55.4, 0.6 points above January's result. The highest reading since January 2003 was 63.1 (occurring in December of 2003), 8.3 points or 15.1% above January's reading.
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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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01/06 54.8 65.0 38% 8% 54%
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12/05 55.6 63.0 37% 11% 52%
11/05 57.3 74.0 53% 5% 42%
10/05 58.1 84.0 70% 2% 28%
09/05 58.0 78.0 60% 4% 36%
08/05 53.5 62.5 36% 11% 53%
07/05 56.4 48.5 24% 27% 49%
06/05 54.0 50.5 22% 21% 57%
05/05 51.8 58.0 32% 16% 52%
04/05 53.8 71.0 52% 10% 38%
03/05 55.3 73.0 51% 5% 44%
02/05 55.6 65.5 38% 7% 55%
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01/05 56.3 69.0 45% 7% 48%
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12/04 58.6 72.0 52% 8% 40%
11/04 56.9 74.0 55% 7% 38%
10/04 56.8 78.5 61% 4% 35%
09/04 58.0 76.0 55% 3% 42%
08/04 59.6 81.5 67% 4% 29%
07/04 61.5 77.0 58% 4% 38%
06/04 61.5 81.0 66% 4% 30%
05/04 62.9 86.0 74% 2% 24%
04/04 63.0 88.0 77% 1% 22%
03/04 62.3 86.0 73% 1% 26%
02/04 62.2 81.5 65% 2% 33%
01/04 62.9 75.5 54% 3% 43%
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12/03 63.1 66.0 37% 5% 58%
11/03 60.6 64.0 33% 5% 62%
10/03 57.2 58.5 26% 9% 65%
09/03 54.4 56.0 21% 9% 70%
08/03 55.5 53.0 19% 13% 68%
07/03 52.3 53.0 21% 15% 64%
06/03 50.5 56.5 26% 13% 61%
05/03 50.0 51.5 21% 18% 61%
04/03 46.5 63.5 37% 10% 53%
03/03 46.4 70.0 47% 7% 46%
02/03 49.9 65.5 <------ NA ------>
01/03 52.8 57.5 <------ NA ------>
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Commodities Reported in Short Supply During January:
(NOTE: The number of consecutive months the commodity is listed is indicated after each item.)
Titanium is the only commodity reported in short supply.
Commodities Reported Up in Price During January:
Aluminum (6); Aluminum Products (2); Caustic Soda (21); Chemicals (24); Copper (8); Copper Products (2); Corrugated Containers (3)*; Energy (12); Natural Gas (42)*; Nickel; Oil Products; Paper; Plastics (18); Resins (7)*; Rubber (3); Steel (28); and Titanium.
Commodities Reported Down in Price During January:
Corrugated Containers*; Natural Gas*; Propylene; and Resins (2)*.
*Reported up and down in price.
On Friday (2/3), ISM will release data covering the economy's service-sector activity during January.
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