The ISM Manufacturing PMI scored 49.5 points in November. Economists’ expectations stood on 51.5 points, after last month’s 51.7 points. So, this is a big disappointment. 50 points separate between growth and contraction. The headline number is the lowest since July 2009.
The most worrying part is that the employment component dropped to 48.4. Expectations stood on 52.1 points. The weak number reflects contraction in job hiring. This is the lowest since September 2009.
Also the important new orders component dropped, but remained above 50 points: 50.3, significantly lower than expected.
EUR/USD traded on high ground around 1.3040 before the release. USD/JPY rose towards 82.40. USD/JPY is now sliding while EUR/USD is stable.
At the same time, the US reported construction spending, which surprised with a rise of 1.4%, significantly better than 0.5% that was expected.
The state of the US economy in the same chunk of releases: manufacturing down, construction up.
Earlier, Markit reported its final PMI for the US, which was revised to the upside from the initial figure: 52.7 instead of 52.4 points. Expectations were for a small slide.
Markit’s US figure is gradually gaining traction, especially as it releases a preliminary version before the month ends. Nevertheless, ISM is still the No. 1 figure.
Comments about the fiscal cliff move currencies quite a bit. Currently, talks are stuck in the mud.
