The ISM manufacturing index unexpectedly climbed to 56.4 in October from 56.2 in September, suggesting that manufacturing activity accelerated even as the government shutdown and debt ceiling debate dominated headlines.
This confirmed Thursday’s huge Chicago PMI number, which exploded to 65.9, the highest level since March 2011.
However, Societe Generale’s Kit Juckes published an interesting chart in his new “10 Weekend Charts” note that may have you concerned about the ISM reading going forward.
“My final chart is of the US ISM, against the ‘forward-ISM’ which subtracts inventories from new orders and is seen as a leading indicator,” he wrote. “It tells its own tale. Just one to ponder over the weekend. We still expect the US economy to get over the shutdown quite quickly and the Fed to ‘taper’ in March.”
As you can see to the right, the beige line has turned down suggesting the ISM headline number may fall again.
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