2012 Economic Calendar
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ISM Mfg Index  
Released On 9/4/2012 10:00:00 AM For Aug, 2012
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level49.8 50.0 49.5  to 50.5 49.6 

The outlook for the nation's manufacturing sector is increasingly going into reverse based on the ISM's report where new orders, at a sub-50 level of 47.1 in August, show their third straight monthly contraction and at the deepest rate since April 2009. New export orders are definitely part of the problem, at 47.0 for what is also the third straight month of contraction. Manufacturers, as they wait for new orders to return, are increasingly drawing down their backlogs which are at 42.5 for the fifth straight month of contraction.

The lack of new orders is finally starting to hit production which fell a very steep 4.1 points in the month to 47.2 which is the first sub-50 reading since May 2009. Another sign of weakness is the first build in inventories since September 2011 which hints that the slowing is greater than manufacturers were expecting. Import orders are also down while delivery times continue to shorten, both of which are signs of weakness. Input prices rose in the month likely reflecting increases for energy.

One plus is continued gains for employment which however are the slowest in 3 years and won't last if orders don't pop up soon. The Dow is falling to opening lows in immediate reaction to this report as well as to a surprise contraction in construction spending.

Consensus Outlook
The composite index from the ISM manufacturing survey remained under 50, at 49.8 in July compared to 49.7 in June. But the details showed greater trouble with new orders at 48.0, up slightly from June's 47.8 but still showing monthly contraction. Looking ahead, recent regional manufacturing surveys for August have been mixed and do not offer a lot of guidance for the upcoming ISM. Among the Fed surveys, Kansas City and Dallas were mostly improved while Empire State and Philly Fed generally remained negative.

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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