The ISM Manufacturing PMI in the US increased to 61.1 in September, up for a second straight month and above analysts' estimates of 59.5. Today's reading signaled one of the strongest rates of expansion since 1983, however companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand.
ISM's Manufacturing survey increased from 59.9 to 61.1 which is the highest level since May. Meanwhile Markit's US Manufacturing PMI rose slightly from a flash print of 60.5 to 60.7 final, but still remains below 61.1 in August. The latest data indicated a marked improvement in the health of the manufacturing sector. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appNew orders were unchanged against August at 66.7, while the Production Index decreased 0.6 pps to 59.4. The Backlog of Orders Index slid 3.4 pps to 64.8. Employment returned to growth, climbing 1.2 pps on a monthly basis to land at 50.2. On the inflation front, the prices index rose to 81.2 in September from 79.4 in August, suggesting a modest acceleration in the pace of price growth.
"Manufacturing performed well for the 16th straight month, with demand, consumption and inputs registering month-over-month growth, in spite of continuing unprecedented obstacles and ever-increasing demand. Panelists’ companies and their supply chains continue to struggle to meet demand due to difficulties in hiring and a clear cycle of labor turnover, as workers opt for more attractive job opportunities," ISM Chair Timothy Fiore said.
Looking at the latest data, it can be seen that American producers have a huge backlog in terms of the fulfillment of existing orders, and the increase in consumer demand means that new orders are constantly flowing into the market. This means that, for the first time in a long time, producers have significant pricing power and can therefore pass on their higher costs to consumers. The end result is that consumer price inflation may remain elevated for an even longer period of time.
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