The ISM Manufacturing PMI rose back above 50 points and scored 51.5 points in September. This is better than a marginal rise to 49.8 that was expected and breaks 3 months of figures pointing to contraction.
EUR/USD reacts with a rise – a “risk appetite†reaction.
It is interesting to note that also two important components of the index have improved: the employment component, which can be seen as a hint towards the Non-Farm Payrolls release, rose from 51.6 to 54.7 – a significant rise. Also the forward looking new orders component rose from 47.1 to 52.3 points – a shift from contraction to growth. Prices rose to 58 points, more than 55.6 that was predicted.
Earlier, Markit’s final PMI for this sector was revised to the downside: 51.1 instead of 51.5 points. The US economy is still growing at a very slow speed according to the latest revision for Q2. Some suspect that the US is already in recession.
The US also released the Construction Spending figure, and this fell by 0.6%, much worse than a rise of the same scale that was predicted. However, it came on top of a better than reported number for the previous month (-0.4% instead of -0.9%), so the overall picture is not terrible.
Update: the head of the ISM says “many comments reflecting gain in new ordersâ€.
