WASHINGTON (MaceNews) \u2013 The Institute of Supply Management September reading of U.S. manufacturing showed overall momentum slowing though the index improved slightly to a still contractionary 49.1 and the report\u2019s organizer warned that the weakening could be a leading indicator.<\/p>\n
\u201cThe panelists are clearly saying that their customers are just not ordering,\u201d said Susan Spence in a conference call with reporters. She is chair of the ISM survey committee. \u201cTo me, there\u2019s a straight line from the uncertainty that remains to new orders being down.\u201d<\/p>\n
New orders slipped to being in the red after a bump up in August, a reading of 48.9 vs. 51.4.<\/p>\n
The ISM report of manufacturing momentum \u2013 or lack thereof \u2013 is being even more closely watched by market participants amidst the sudden dearth of government statistics now that the government is mostly shut down. The includes Friday\u2019s likely absence of the monthly jobs report from the Bureau of Labor Statistics. Only a quick reversal of political positions in the Senate \u2013 a seeming impossibility \u2013 could reschedule the jobs report.<\/p>\n
Spence said the consensus seemed to be that the Federal Reserve\u2019s quarter point rate cut a week ago is not helping much \u201cbecause there\u2019s such uncertainty and the tariffs that are in place.\u201d Firms \u201cfeel very uncomfortable in the lack of new orders.\u201d<\/p>\n
Capitol investment plans are on hold, she said, and they \u201ccannot be putting them on hold forever.\u201d<\/p>\n
Manufacturing tends to be first hit in an economic slowdown, a leading indicator of what\u2019s in store for everything else, she said, even though the economy as a whole is still expanding.<\/p>\n
Answering a question from Mace News, Spence said the uncertainty is not just about the future impact of tariffs but \u201cpanelists are telling us we aren\u2019t certain\u201d that existing tariff deals are \u201cjust not going to change again.\u201d Decision making \u201cjust needs to settle down,\u201d she said.<\/p>\n
The government shutdown, she said, could be particularly impactful for those defense firms that need government auditors to continually approve output.<\/p>\n
The ISM survey of purchasing managers suggests manufacturing has been in contraction for seven straight months with employment down for eight months.<\/p>\n
Most striking was the September plunge in export orders, dropping 4.6 percentage points to 43.0, a direct effect of the tariff environment.<\/p>\n
Production ticked up to an expansionary 51.0 from 47.8 but that surge was dismissed by Spence as temporary, just the August increase in new orders moving through the pipeline.<\/p>\n
Prices slowed their rate of increase, posting a 61.9 compared to August\u2019s 63.7.<\/p>\n
Respondent comments reflected concern with the tariff\u2019s effect on supply chains, with one saying, \u201cSteel tariffs are killing us.\u201d The sectoral U.S. tariffs on imported steel and aluminum were imposed separately from the so-called reciprocal tariffs which apply to different degrees country by country.<\/p>\n
Sal Guatieri, senior economist for BMO Capital Markets, summed it up, labeling his analysis, \u201cU.S. Manufacturers Not Feeling Tariff-ic.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (MaceNews) \u2013 The Institute of Supply Management September reading of U.S. manufacturing showed overall momentum slowing though…\n","protected":false},"author":2,"featured_media":44705,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-54664","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/54664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=54664"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/54664\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/44705"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=54664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=54664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=54664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}