US: Biggest drop in ISM in ten years – Nordea Markets
Anders Svendsen, analyst at Nordea Markets, notes that the US ISM index registered its biggest drop in one month since October 2008 as it fell by 5 points in December, with details being on an even weaker side.
“The ISM manufacturing index dropped to 54.1 in December from 59.3 in November (consensus: 57.5). The most forward-looking new orders component dropped to 51.1 from 62.1 most of which was due to the domestic economy as new export orders increased modestly.”
“The ratio of new orders to inventories point to a further drop in the production component in the January reading of close to 50.”
“The Fed is likely to be concerned with slowing momentum in the manufacturing sector, but will be looking at Monday's release of the non-manufacturing index as well, which represents a much larger share of the economy, and at the labour market.”