The ISM manufacturing index released by the United States on Wednesday (4th) fell to 48.4 in December last year, shrinking for the second consecutive month, lower than market expectations of 48.5, and lower than November’s 49.0, the lowest since May 2020. For the whole of last year, the index fell 10.4 points, the largest annual drop since 2008. The good news is that commodity inflation continues to cool, with the price index falling to its lowest level in more than two-and-a-half years amid weakening demand.
December US ISM manufacturing index breakdown:
- New orders index reported 45.2, the previous value of 47.2
- The production index reported 48.5, the previous value was 51.5
- The employment index reported 51.4, the previous value of 48.4
- The supplier delivery index reported 45.1, the previous value of 47.2
- The inventory index reported 51.8, the previous value was 50.9
- The client inventory index reported 48.2, the previous value was 48.7
- The price index reported 39.4, the previous value of 43.0
- Unfilled orders index reported 41.4, the previous value of 40.0
- Export orders index reported 46.2, the previous value of 48.4
- The import index of raw materials reported 45.1, the previous value was 46.6
Observing the details of the data, the new order index in December reported 45.2, a drop from the previous value of 47.2, the lowest since May 2020, and has shrunk for the fourth consecutive month, while the production index also fell from 51.5 in November to 48.5 In the shrinking range, two weak data points to further weakening of demand in the future.
In December, the export order index was reported at 46.2, down once more from the previous value of 48.4; the import index of the raw material import index was reported at 45.1, lower than the previous value of 46.6, and the two data have fallen into the shrinking range.
It is worth noting that the price index in December reported 39.4, a new low since April 2020, far below market expectations of 42.9 and the previous value of 43. This is the ninth consecutive month of decline in the price index, the longest since 1974-1975. The longest descent.
In terms of the labor market, the employment index rose to 51.4 from the previous value of 48.4 in December, returning to the expansion range and hitting a new high in four months. In addition, the supplier delivery index fell to 45.1 in December from 47.2 in the previous month. Shrinking demand combined with easing supply chains has seen suppliers deliver faster, the lowest level since March 2009.
According to previous data released by S&P Global, the final value of Markit Manufacturing Purchasing Managers Index (PMI) in the United States in December was 46.2, the initial value was 46.2, still in the shrinking range, and it is also a new low since the outbreak of the new crown epidemic. The trend given by the ISM manufacturing index is in line with that.
Market analysis pointed out that the ISM manufacturing index highlighted that consumer spending preferences shifted to services and away from goods, coupled with rising interest rates and weakening global economic activity, putting factories under pressure. The heightened uncertainty and slumping demand suggest that the challenges facing manufacturers will continue this year.
Market Reaction
Bad news in economic data is no longer good news for markets. At present, the market is generally worried that a weakening economy will drag down the earnings of US stocks and hit the market. After the release of the ISM manufacturing index for December in the United States, major US stock indexes once fell, but then resumed their gains.
before the deadline,Dow Jones Industrial Averagerose more than 80 points or nearly 0.3%,Nasdaq Composite Indexrose more than 50 points or nearly 0.6%,S&P 500 Indexup 0.6%,Philadelphia SemiconductorThe index rose more than 2%.
