ISM Manufacturing Report Exceptionally Strong

Modest easing in new orders headlines what is another exceptionally strong ISM manufacturing report where the headline index, at 59.8 for September, came in right at expectations. New orders slowed more than 3 points but remain very strong, at 61.8 and with export orders, in contrast to this morning's PMI manufacturing report, also strong at 56.0.

The build in backlog orders eased 2 points but remains elevated at 55.7 with other indications of capacity stress also easing but only slightly as both delivery delays and cost increases, at 66.9, remain heavy. The stress, however, isn't slowing production which rose 6 tenths to 63.9 for the strongest showing since January this year. The rate of inventory build eased slightly for both raw materials and finished goods.

In another contrast with this morning's PMI manufacturing report, hiring in this sample was very strong, at 58.8 for a 3 tenths gain from August for the strongest showing since February this year. Though consistently running much hotter than not only the manufacturing PMI but actual government data on the factory sector, today's ISM report is closely watched and will firm expectations for a strong 2018 finish for the nation's manufacturing sector.