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3 Mar 2015
US ISM drops, raises concerns about NFP – ING
FXStreet (Barcelona) - According to James Knightley, Senior Economist at ING, the fall in ISM manufacturing index marks a substantial slowdown in recent months, and raises concerns over Friday’s payrolls number.
Key Quotes
“Yesterday’s ISM manufacturing survey showed the headline index dropping to 52.9 in February versus 53.5 in January. Whilst pretty much in line with expectations, it was the weakest reading since January 2014. Bad weather may well have depressed activity a little and the West Coast port disruption could also have played a part.”
“Consequently, we suspect that we will see a better number for March.”
“In terms of the details, production fell nearly three points to 53.7 – a 12-month low – while new orders dropped to its lowest reading since May 2013. There was a pick-up in the backlog of orders, which is a sign of bad weather influencing the report.”
“Export orders deteriorated while the employment component fell nearly three points to the lowest level since June 2013 – the historical relationship with manufacturing payrolls suggests we could see a negative manufacturing employment figure on Friday.”
“This is a concern, but the bulk of jobs growth has been driven by services so we will have to wait for Wednesday’s ADP and non-manufacturing ISM employment numbers to gauge whether there are downside risks to the consensus prediction of a 235,000 increase in non-farm payrolls.”
Key Quotes
“Yesterday’s ISM manufacturing survey showed the headline index dropping to 52.9 in February versus 53.5 in January. Whilst pretty much in line with expectations, it was the weakest reading since January 2014. Bad weather may well have depressed activity a little and the West Coast port disruption could also have played a part.”
“Consequently, we suspect that we will see a better number for March.”
“In terms of the details, production fell nearly three points to 53.7 – a 12-month low – while new orders dropped to its lowest reading since May 2013. There was a pick-up in the backlog of orders, which is a sign of bad weather influencing the report.”
“Export orders deteriorated while the employment component fell nearly three points to the lowest level since June 2013 – the historical relationship with manufacturing payrolls suggests we could see a negative manufacturing employment figure on Friday.”
“This is a concern, but the bulk of jobs growth has been driven by services so we will have to wait for Wednesday’s ADP and non-manufacturing ISM employment numbers to gauge whether there are downside risks to the consensus prediction of a 235,000 increase in non-farm payrolls.”