Manufacturing Lumbers Ahead In December - January 2, 2013
Manufacturing activity strengthened ever so slightly in December, coming in with a mildly positive reading of 50.7. That was just a bit better than the 50.5 result that had been widely expected, and somewhat above the November reading of 49.5. All told, this key industrial sector has recorded results between 49.5 and 51.7 ever since June.
The data, issued by the Institute for Supply Management (ISM), affirmed that this industrial category is essentially marking time, as a reading above 50.0 signals that the industrial area is improving while a result below that level suggests some contraction. In truth, this area remains quite sluggish, especially in comparison to where manufacturing had been earlier in 2012, when this key gauge had been up closer to 55.
Helping this survey stay above the 50.0 dividing line between expansion and contraction was modest strength in production, supplier deliveries, employment, prices, and exports. Hampering results were declines last month in backlogs and inventories, and an essentially neutral reading of just 50.3 in new orders.
In all, this was just the third increase in aggregate manufacturing activity in the past seven months, and at 50.7 the results can hardly be termed uplifting. It also closely tracked the results on the retail front, where holiday sales were not all that impressive. Note, too, that this report comes just two days from the companion issuance by the ISM of non-manufacturing activity. That result is also expected to show a modest expansion in a category that tracks the services sector.
Meanwhile, the best improvement was seen in employment, where the gauge increased from November's 48.4 to last month's 52.7. That could hopefully be an indication of a better result this Friday morning when the U.S. Labor Department reports on its findings on non-farm payrolls for December. Present expectations are that this metric will show a gain of some 150,000 jobs for that month, while the jobless rate is expected to have ticked up from 7.7% in November to 7.8% during the old year's final month.
On the whole, this report was not exceptional, but did show some incremental progress within a modest range it has stayed in now for more than a half year.
At the time oif this article's writing, the author did not have positions in any of the companies mentioned.