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1 Feb 2016
US manufacturing ISM weaker, but... - ING
FXStreet (Guatemala) - James Knightley, analyst at ING Bank explained that US manufacturing ISM for January is a bit weaker than expected at 48.2 (consensus 48.4, previous 48.0) and marks the fourth straight sub-50 (contraction territory) outcome.
Key Quotes:
"However, the details are more encouraging with both production and new orders moving back above 50. The main weakness was in the employment component, which fell to 45.9 from 48.0 – the worst outcome since June 2009.
This suggests that the sector will be a drag on overall employment growth in Friday's payrolls report and indicates the consensus is being a little optimistic in thinking that US manufacturing employment is only going to fall 2k. Indeed, we were seeing manufacturing employment fall by around 25-50k per month in 2009 when the ISM employment component was last at these sorts of levels. As a result, the overall payrolls consensus figure for Friday at 190k is looking a bit high too."
Key Quotes:
"However, the details are more encouraging with both production and new orders moving back above 50. The main weakness was in the employment component, which fell to 45.9 from 48.0 – the worst outcome since June 2009.
This suggests that the sector will be a drag on overall employment growth in Friday's payrolls report and indicates the consensus is being a little optimistic in thinking that US manufacturing employment is only going to fall 2k. Indeed, we were seeing manufacturing employment fall by around 25-50k per month in 2009 when the ISM employment component was last at these sorts of levels. As a result, the overall payrolls consensus figure for Friday at 190k is looking a bit high too."