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US ISM Manufacturing Surges Back Up

Posted Tuesday, January 5, 2021 by
Skerdian Meta • 1 min read

MANUFACTURING AT A GLANCE
December 2020
Index	Series Index	Series Index	Percentage	Direction	Rate of Change	Months
	Dec	Nov	Point
			Change
Manufacturing PMI®	60.7	57.5	3.2	Growing	Faster	7
New Orders	67.9	65.1	2.8	Growing	Faster	7
Production	64.8	60.8	4	Growing	Faster	7
Employment	51.5	48.4	3.1	Growing	From Contracting	1
Supplier Deliveries	67.6	61.7	5.9	Slowing	Faster	14
Inventories	51.6	51.2	0.4	Growing	Faster	3
Customers’ Inventories	37.9	36.3	1.6	Too Low	Slower	51
Prices	77.6	65.4	12.2	Increasing	Faster	7
Backlog of Orders	59.1	56.9	2.2	Growing	Faster	6
New Export Orders	57.5	57.8	-0.3	Growing	Slower	6
Imports	54.6	55.1	-0.5	Growing	Slower	6
OVERALL ECONOMY				Growing	Faster	8
Manufacturing Sector				Growing	Faster	7

The US manufacturing sector continues to impress. In fact, manufacturing rebounded well worldwide in summer after the lock-downs, but the US manufacturing has performed extremely well. It keeps increasing and today’s report showed another jump, taking the ISM indicator above 60 points.

We saw a cool off in November, but the expansion resumed again in December and now this indicator is heading for all time highs. This should be positive for the USD, but the Buck is waiting for the politic scene to clear up in the US, with elections in Georgia this week.

ISM manufacturing

ISM December manufacturing index 60.7 points vs 56.7 expected
Highest reading since Aug 2018
November manufacturing index was 57.5 points
New orders 67.9 points vs 65.1 (prior 65.1 points)
Prices paid 77.6 points vs 65.0 expected (prior 65.4 points )
Employment 51.5 points vs 48.4 prior

This is a great report, something I warned about earlier. With a slight bump from here, it will be at the highest since 2004. The gains comes after a strong Markit manufacturing PMI yesterday. The jump in prices paid should be concerning for the Fed but they continue to brush it off.

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