Analysts at Nomura offered their review of the ISM manufacturing survey and update their GDP tracker.
Key Quotes:
“The ISM manufacturing survey index fell to 59.8 in September, roughly matching expectations (Nomura: 59.0, Consensus: 60.0), from 61.3 in August. The production index improved 0.6pp to 63.9, consistent with strong current momentum, but the new orders index fell 3.3pp to 61.8 from 65.1, lowering the headline index. The report indicated that the respondents remained “overwhelmingly concerned” about tariffs, but production activity appears elevated with most industries reporting growth. There appears to be no material supply-chain disruptions from Hurricane Florence. The employment index remained elevated at 58.8, suggesting healthy hiring activity. The new exports orders and imports indices improved in September after easing slightly in August. The prices paid index fell to 66.9 from 72.1, with an easing in the supplier deliveries index, pointing to some weakening of pipeline inflationary pressures.”
GDP tracking update:
“Although the continued weakness in residential construction was slightly negative to the corresponding component of GDP, recent strong growth in public construction expenditure led by state and local governments led us to revise up our estimate of government spending. On net, we revised up our Q3 GDP tracking by 0.1pp to 3.2%.”
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