• New orders weakened to 48.8 in May, from 52.3 in April
• New export orders weakened to 51.0, from 54.0 in April
•Employment weakened marginally to 50.1, from 50.2 in April
ISM manufacturing at 49.0 in May, weaker than expected
ISM manufacturing weakened to 49.0 in May, from 50.7 in April. This was weaker than expectations of an unchanged reading of 50.7.
ISM manufacturing components
New orders strengthened to 48.8 in May, from 52.3 in April, while new export orders weakened to 51.0, from 54.0 in April. Employment weakened marginally to 50.1, from 50.2 in April. Finally, inventories strengthened to 49.0 from 46.5 in April.
ISM likely to bounce back above 50 in coming months
Recent worse-than-expected incoming data have likely weighed on business sentiment. Moreover, there were also concerns as to how the fiscal headwinds would affect the US economy. Exports have disappointed. However, a sharp recovery of the housing market worked in the other direction. We expect ISM manufacturing to bounce back above the 50-threshold in coming months.
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