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By HaleStewart October 7, 2013 2:37 pm
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Review of US Economic Numbers For the Week of September 30 Through October 4

Last week, most of the economic information released about the US dealt with the manufacturing sector.  The overall purchasing managers index (or PMI) printed at 56.2 (a reading above 50 indicates expansion).  While the new orders sub-category decreased 2.7 points, its total still came in at 60.5 which is a very high level.  The overall production level (another sub-category) also printed at a very high 62.6 level.  Each of these reports contains a series of anecdotal phrases which are included to give a flavor for the type of overall responses survey participants are providing.  A large majority of these phrases were positive; here are a few samplings:

•    "Housing continues to improve, resulting in improved conditions for our industry." (Furniture & Related Products)
•    "Rising costs of China labor has us re-evaluating our current position in that country." (Computer & Electronic Products)
•    "Steady increase in work this month." (Primary Metals)


Markit also released its overall manufacturing survey.  While their numbers were lower, they confirm the US sector is clearly in an expansion:

The manufacturing expansion in the U.S. eased to a three-month low in September, according to the final Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™)1. At 52.8, down from 53.1 in August and in line with the flash estimate, the PMI indicated that manufacturing business conditions improved modestly over the month.

Two regional reports confirm the overall positive trend in US manufacturing.  The Chicago purchasing mangers’ report increased 2.7 points to an overall level of 55.7.  And the Dallas index rose from 7.3 to 11.5.  

The Institute for Supply Management also released its survey of the non-manufacturing sector, which dropped 4.2 points to 54.4.   The sub-indexes for overall production and new orders also moved lower, but still indicated expansion.  However, the anecdotal information in these report was a bit less upbeat, with several people noting that demand was softening somewhat.

The sum total of all these numbers is the US economy is still expanding, especially in the manufacturing sector.  All of the indexes for this part of the economy were positive.  While services are still expanding, some information is showing a bit of weakening.  While this isn’t enough to indicate a sharp slowdown, it may be an indication that market participants were anticipating the effects of the overall government shutdown last month.

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Steven_Dengler Posts: 4

Great post, Hale. Thanks!

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