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US Manufacturing PMI Disappoints – Employment Component Dips

The ISM Manufacturing PMI slides to 52.4. Early expectations stood on a small rise from 54.1 to 54.6 points.

The employment component slid from 54.3 to 53.2 points. This still points to growth, but slower than last month.

EUR/USD is rising and USD/JPY is falling after the publication. The dollar suffers as the chances of QE3 on March 13th has a somewhat higher chance. The baseline scenario remains that there will be no new QE in March.

This was the 31st month of expansion in a row in the headline figure, and a 29th straight expansion in employment.

While the services sector is larger than the manufacturing one, this is still a disappointment. ISM Manufacturing prices leapt from 55.5 to 61.5 points. A rise to 57.6 was predicted.

Are higher oil prices already taking their toll?

Earlier, US jobless claims were at 351K, within expectations of 350K. Last week’s figure was revised to the upside, form 351K to 353K.

Ben Bernanke will continue his official testimony today. Yesterday, Bernanke provided a rather soft outlook for the economy, but his comment about a better than expected improvement in employment sent the dollar higher.

Also in the US, Construction Spending dropped by 0.1%, worse than a rise by 1.1% that was expected. Last month saw a rise of 1.4%.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.