USD: US ISM Manufacturing PMI Falls to 48.7 in May, Below 49.6 Expected
US ISM Manufacturing PMI data came at 48.7 in the May month from 49.2 printed in the April month and 49.6 is expected. Employment index came at 51.1 versus 48.6 printed in the April month, New orders index came at 45.4 in the May month from 49.3 printed in the April month, inflation component came at 57 from 60.9 in the April month. Input costs lower, output is contracted makes US Dollar little down in the market against currency pairs.
EURUSD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
The business activity in the US manufacturing sector contracted at an accelerating pace in May, with the ISM Manufacturing PMI dropping to 48.7 from 49.2 in April. This reading was below the market expectation of 49.6.
Key points from the PMI survey include:
– The Employment Index improved to 51.1 in May from 48.6 in April.
– The New Orders Index fell sharply to 45.4 from 49.1.
– The Prices Paid Index, which measures inflation, decreased to 57 from 60.9.
Commenting on the survey’s findings, Timothy R. Fiore, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee, said, “US manufacturing activity continued to contract after a brief period of growth in March, the first expansion for the sector since September 2022. Demand was soft again, output was stable, and inputs remained accommodative.”
USD: Manufacturing PMI at 48.7%: May 2024 ISM Report
The US ISM Manufacturing PMI data for May was reported at 48.7, a decrease from April’s figure of 49.2, falling short of the expected 49.6. In terms of specific indices within the PMI:
– The Employment Index rose to 51.1 in May from 48.6 in April.
USD Index Market price is moving in Ascending channel and market has reached higher low area of the channel
– The New Orders Index dropped to 45.4 in May from 49.3 in April.
– The Prices Paid Index, which measures inflation, decreased to 57 from 60.9 in April.
With input costs declining and output contracting, the US dollar experienced a slight decline in the market against various currency pairs.
Manufacturing PMI® at 48.7%; May 2024 Manufacturing ISM® Report On Business®
New Orders and Backlogs Contracting; Production and Employment Growing; Supplier Deliveries Faster; Raw Materials Inventories Contracting; Customers’ Inventories Too Low; Prices Increasing; Exports and Imports Growing
– The Manufacturing PMI® dropped to 48.7 percent in May, down 0.5 percentage point from April’s 49.2 percent. While this indicates contraction, the overall economy has remained in expansion for the 49th consecutive month.
– The New Orders Index fell to 45.4 percent, 3.7 percentage points lower than April’s 49.1 percent.
– The Production Index decreased to 50.2 percent, down 1.1 percentage points from April’s 51.3 percent.
– The Prices Index dipped to 57 percent from April’s 60.9 percent.
– The Backlog of Orders Index declined to 42.4 percent from April’s 45.4 percent.
– The Employment Index improved to 51.1 percent, up 2.5 percentage points from April’s 48.6 percent.
Fiore commented, “U.S. manufacturing activity continued in contraction after growing in March, the first expansion for the sector since September 2022. Demand was soft again, output was stable, and inputs stayed accommodative. Demand slowing was reflected by the (1) New Orders Index dropping deeper into contraction, supported by additional comments regarding ‘softening,’ (2) New Export Orders Index edging back into marginal expansion, (3) Backlog of Orders Index regressing lower into contraction territory, and (4) Customers’ Inventories Index at the ‘just right’ level, neutral for future production.”
He continued, “Output (measured by the Production and Employment indexes) advanced compared to April, with a combined 1.4-percentage point upward impact on the Manufacturing PMI® calculation. Panelists’ companies maintained production levels month over month, and head count reductions continued in May. Inputs — defined as supplier deliveries, inventories, prices, and imports — continued to accommodate future demand growth.”
Fiore also noted, “Fifty-five percent of manufacturing gross domestic product (GDP) contracted in May, up from 34 percent in April. More importantly, the share of sector GDP registering a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 4 percent in May, the same as in April, but an indication of better health than the 27 percent recorded in January.”
According to the report, seven manufacturing industries reported growth in May, including Printing & Related Support Activities; Petroleum & Coal Products; Paper Products; Textile Mills; Primary Metals; Fabricated Metal Products; and Chemical Products. On the other hand, seven industries reported contraction, including Wood Products; Plastics & Rubber Products; Machinery; Computer & Electronic Products; Furniture & Related Products; Transportation Equipment; and Food, Beverage & Tobacco Products.
USD: US ISM Manufacturing Drops to 48.7, Equivalent to 1.7% Annualized GDP Growth
In May, the US ISM Manufacturing PMI decreased to 48.7 from April’s 49.2, falling short of the expected 49.6. The Employment Index rose to 51.1 from April’s 48.6, while the New Orders Index dropped to 45.4 from 49.3. The inflation component decreased to 57 from 60.9 in April. Lower input costs and contracted output contributed to a slight decline in the US dollar against various currency pairs in the market.
USDJPY is moving in an Ascending channel and the market has fallen from the higher high area of the channel
In May, the US ISM Manufacturing PMI dropped from 49.2 to 48.7, falling short of the expected 49.8. Several key indicators within the PMI also experienced changes:
– New orders decreased from 49.1 to 45.4.
– Production declined from 51.3 to 50.2.
– Employment increased from 48.6 to 51.1.
– Prices fell from 60.9 to 57.0.
According to ISM, “The past relationship between the Manufacturing PMI and the overall economy indicates that the May reading (48.7 percent) corresponds to a change of plus-1.7 percent in real gross domestic product (GDP) on an annualized basis.”
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