Manufacturing rebounded last month largely on the “strength” of inventory rebuilding, but the services ISM came in weaker than expected. Nigel Gault, chief U.S. economist at IHS Global Insight, summed things up nicely in one word “unimpressive“.
Please consider the June 2011 Non-Manufacturing ISM Report On Business®
click on chart for sharper image
Expectations were for 53.7, the index came in at 53.3. This was not a disaster, it just was not very good. Employment was the one bright spot, but it was up a statistically meaningless .1.
Backlog of orders is contracting, as is the backlog of manufacturing orders. I expect more weakness coming in both the services ISM and the manufacturing ISM in the months ahead.
Inventory rebuilding will not sell cars, boats, or durable goods in general. In case you missed it, please see Manufacturing ISM Weaker Than it Looks; Digging Into the Numbers; Inventory Restocking Accounts for Much of the Rise
Mike “Mish” Shedlock
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