Manufacturing ISM Nothing to Crow About

The Institute for Supply Management released the September 2011 Manufacturing ISM Report On Business�

The PMI registered 51.6 percent, an increase of 1 percentage point from August, indicating expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate. The Production Index registered 51.2 percent, indicating a return to growth after contracting in August for the first time since May of 2009.

MANUFACTURING AT A GLANCE SEPTEMBER 2011
Index	Series Index Sep	Series Index Aug	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	51.6	50.6	+1.0	Growing	Faster	26
New Orders	49.6	49.6	0.0	Contracting	Same	3
Production	51.2	48.6	+2.6	Growing	From Contacting	1
Employment	53.8	51.8	+2.0	Growing	Faster	24
Supplier Deliveries	51.4	50.6	+0.8	Slowing	Faster	28
Inventories	52.0	52.3	-0.3	Growing	Slower	2
Customers' Inventories	49.0	46.5	+2.5	Too Low	Slower	30
Prices	56.0	55.5	+0.5	Increasing	Faster	27
Backlog of Orders	41.5	46.0	-4.5	Contracting	Faster	4
Exports	53.5	50.5	+3.0	Growing	Faster	27
Imports	54.5	55.5	-1.0	Growing	Slower	25
OVERALL ECONOMY				Growing	Faster	28
Manufacturing Sector				Growing	Faster	26

A Bloomberg writer managed to managed to spin those ISM numbers into the headline U.S. Stocks Fall as Concern Over Greek Debt Crisis Offsets Economic Data stating "Earlier today, stocks rose as a report showed that manufacturing in the U.S. unexpectedly accelerated in September as production picked up, easing concern the world�s largest economy is stalling."

That is complete silliness. Exactly whose concern is eased?

A new concern ought to be the expansion in hiring and production while orders and especially backlog of orders is contracting.

Manufacturers are producing at an unsustainable rate. The global economy is rapidly cooling led by Europe, Asia, and Australia. That is a lot of downside leadership. The US is not immune and indeed is likely in recession already as noted in ECRI Calls Recession Based on "Contagion in Forward Indicators"; Just How Timely is the Call?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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