2012 Economic Calendar
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ISM Mfg Index  
Released On 8/1/2012 10:00:00 AM For Jul, 2012
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level49.7 50.1 48.5  to 51.1 49.8 

The US manufacturing sector is dropping, especially unfortunately orders. The ISM's composite headline index remains under 50, at 49.8 in July vs 49.7 in June. But the details show greater trouble with new orders at 48.0, up slightly from June's 47.8 but still showing monthly contraction. Export orders are an increasing and central negative, at 46.5 for a 1 point drop from June and reflecting weakness in both Europe and Asia. Manufacturers, lacking new orders, are working down their backlogs which are very low at 43.0 for a 1.5 point monthly decline.

Production is still growing as is employment but this won't go on for long if new orders don't start coming in. Inventories are thinning but only slightly while delivery times are shortening. Input prices, in a another reflection of weak demand, are contracting.

This report shows more weakness than the Markit Economics report earlier this morning and is likely to be a negative for the market today, at least ahead of the mid-afternoon FOMC statement. Following this report, the Dow is moving off opening highs.

Consensus Outlook
The composite index from the ISM manufacturing survey in June declined to 49.9 (breakeven at 50) from 53.5 in May. Forward momentum hit the wall at the new orders index, at 47.8 in June versus 60.1 the month before to show contraction for the first time since April 2009 and the degree of the decline was the steepest since October 2001. For what it's worth, the October 2001 drop in orders was followed by an almost equal rebound the next month and was above the pre-drop level the second month afterwards.

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
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

2012 Release Schedule
Released On: 1/32/13/14/25/16/17/28/19/410/111/112/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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