2010 Economic Calendar
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ISM Mfg Index  
Released On 8/2/2010 10:00:00 AM For Jul, 2010
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level56.2 54.0 52.5  to 55.5 55.5 

Highlights
New orders slowed abruptly in July, in what is the key headline of the Institute For Supply Management report. New orders fell to 53.5, still above 50 to indicate month-to-month growth but down five points from June to indicate a significantly slower rate of growth. The 53.5 reading is the lowest since the manufacturing sector emerged from recession this time last year. Backlog orders also slowed, to 54.5 for a 2-1/2 point decline and its lowest reading since December.

Production slowed nearly 4-1/2 points in July to what for now is a still very strong 57.0. Employment rose nearly one point to 58.6 but the slowing in new orders and backlogs don't point to rising demand for labor. Inventories rose more than four points to 50.2 but, like production employment, aren't likely to show much strength in the months ahead.

The headline composite index of 55.5 is the slowest rate so far this year. The manufacturing sector led the economy out of recession but its leadership may now be fading.

Recent History Of This Indicator
The composite index from the ISM manufacturing survey in June slowed to 56.2 from May's very strong 59.7. The slowdown was led by a more than 7 point decline in new orders to a 58.5 reading that nevertheless indicates a strong month-to-month gain, only a smaller gain than in May. Looking ahead, the new orders index would suggest a composite that is only moderately above breakeven. But the July reading for the Chicago PMI - which includes nonmanufacturing as well as manufacturing - showed an unexpected boost for July. We may see the same for ISM manufacturing.

Definition
The manufacturing composite index from the Institute For Supply Management is a diffusion index calculated from five of the eleven sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms nationwide. The survey queries purchasing managers about the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The five components of the composite index are new orders, production, employment, supplier deliveries, and inventories (their own, not customer inventories). The five components are equally weighted. The questions are qualitative rather than quantitative; that is, they ask about the general direction rather than the specific level of activity. Each question is adjusted into a diffusion index which is calculated by adding the percentage of positive responses to one-half of the unchanged responses.  Why Investors Care
 
[Chart]
The ISM manufacturing index (formerly known as the NAPM Survey) is constructed so that any level at 50 or above signifies growth in the manufacturing sector. A level above 43 or so, but below 50, indicates that the U.S. economy is still growing even though the manufacturing sector is contracting. Any level below 43 indicates that the economy is in recession.
Data Source: Haver Analytics
 
 

2010 Release Schedule
Released On: 1/42/13/14/15/36/17/18/29/110/111/112/1
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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