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U.S. manufacturing sector contracts for 3rd straight month, ISM says

Posted May 1st 2008 12:39PM by Joseph Lazzaro (RSS feed)
Filed under: Bad news, Industry, Economic data, Recession

Institute for Supply Management Manufacturing Index for April 2008 was unchanged at 48.6, compared to March 2008's reading, which was revised up 0.3, the institute announced Thursday.

Economists surveyed by Bloomberg News had expected the index to drop to 48.0 in April 2008.

Readings above 50 indicate economic growth; readings below 50, economic contraction.

With April 2008's 48.6 reading, the metric has indicated a contraction for three consecutive months.

Continue reading U.S. manufacturing sector contracts for 3rd straight month, ISM says

March ISM services index rises, but still points to contraction

Posted Apr 3rd 2008 12:21PM by Joseph Lazzaro (RSS feed)
Filed under: Economic data

The U.S. services sector improved slightly in March 2008, but remained at levels indicating a contraction, the Institute of Supply Management announced Thursday.

The ISM Non-Manufacturing Index, which measures services, increased 0.3% to 49.6% in March 2008, a slight increase, but a reading still indicative of a contraction. Readings below 50% indicate a contraction; readings above it, expansion.

Economists surveyed by Bloomberg News had expected the ISM Non-Manufacturing Index to total 49.0% for March 2008. The index was at 49.3% in February 2008.

The new orders index increased 0.6% to 50.2%, while the employment index contracted for the third consecutive month, to 46.9%.

Continue reading March ISM services index rises, but still points to contraction

ISM Services Index plunges in January, fanning recession fears

Posted Feb 5th 2008 10:36AM by Joseph Lazzaro (RSS feed)
Filed under: Bad news, Economic data, Recession

The non-manufacturing component, or the service sector, of the U.S. economy contracted substantially in January 2008, fanning fears that the nation's economic slowdown is worsening.

The Institute of Supply Management's non-manufacturing index, which measures about 90% of economic activity, plunged to 41.9% in January 2008 from 54.4% in December 2007 -- its lowest reading since October 2001, the ISI announced Tuesday, in a statement.

Analysts had expected the index to fall to 53%. Readings below 50% indicate most companies are cutting back, or experiencing less business. Moreover, a sub-50% reading usually indicates the U.S. economy is contracting.

An unexpected drop

Economist Glen Langan told BloggingStocks Tuesday the substantial drop is not good news for the U.S. economy.

Continue reading ISM Services Index plunges in January, fanning recession fears

Manufacturing contracts to weakest level since April 2003

Posted Jan 2nd 2008 12:44PM by Joseph Lazzaro (RSS feed)
Filed under: Bad news, Economic data, Federal Reserve

The nation's factory sector contacted in December 2007 to its weakest level since April 2003, the Institute of Supply Management announced Wednesday. The ISM index fell to 47.8% in December 2007 from 50.8% in November 2007. Readings below 50% indicate a contracting industrial sector. Analysts had expected a December 2007 ISM reading of 50.9%.

In all, only seven of 18 industrial segments expanded. Moreover, economic activity in the manufacturing sector failed to grow in December 2007 after 10 consecutive months of expansion, while the overall economy grew for the 74th consecutive month, the ISM announced.

Disappointing statistic

Economist Steve Affinito told BloggingStocks Wednesday that the ISM statistic will place more pressure on the U.S. Federal Reserve to continue to cut short-term interest rates.

"It's a disappointing statistic, no question. We were looking for something slightly north of [above] 50% and a reading below 50%, that has to concern the Fed. It's just one month but it indicates that manufacturing is contracting, and at minimum is likely to grow to slowly," Affinito said. "The Fed will have to cut interest rates at least two more times to help prevent an economic stall. The December ISM stat is not a number the Fed hawks can ignore."

Continue reading Manufacturing contracts to weakest level since April 2003

Despite profit slump, recession talk deemed premature

Posted Dec 3rd 2007 2:30PM by Joseph Lazzaro (RSS feed)
Filed under: Analyst reports, Good news, Ford Motor (F), General Motors (GM), Economic data

Corporate profits have slowed in Q3, and U.S. economic growth most likely slowed in Q4 as well, but analysts say talk of a recession may be slightly premature.

Corporate profits fell to an annual rate of $19.3 billion in Q3 as domestic earnings dropped by $41.2 billion, according to U.S. Commerce Department data. The U.S. economy is being hurt by sluggish retail sales and write-downs in the subprime mortgage sector; the two have been offset by strong earnings abroad, but the domestic side may outdo the international side in Q4.

"The earnings recession has already arrived,'' said David Rosenberg, North America economist for Merrill Lynch (NYSE: MER) in New York told Bloomberg News. "We are going to see an economic recession in '08.''

The Institute of Supply Management's manufacturing index for November 2007 totaled 50.8, above the consensus estimate, but slower than October 2007's reading of 50.9. Any reading above 50 indicates economic expansion.

Continue reading Despite profit slump, recession talk deemed premature

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Last updated: November 25, 2009: 10:27 PM

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