Estimated Local New Orders: New orders - New Export Orders = -2.5 - (-4.6) = +2.1
Estimated Local Material: Inventories - Imports = -1.7 - (-1.3) = -0.4
The latest ISM PMI indicated that the estimated local new order continued to increase (+2.1) from the previous month to mitigate the significant fall in new export orders but it was still not enough to reverse the fall in new orders.
Although the producers had increased their production by using more inventories (declining) and boosting employment to churn out more goods, it was not enough to replace the depleting customers' inventories. Thus, the backlog of orders increased because of underproduction despite the fall in new orders.
As the US GDP structure had changed and the US had become a global seller, the significant drop in new export orders might indicate that the world was resisting the dumping of US goods. We'll have to watch out for a persisting decline in new export orders to confirm this. Thus, the next few months of PMI will be something to look out for.
Once again, this PMI report continues to paint a bleak outlook (contraction - below 50) for the US economy.
No comments:
Post a Comment