ISM Manufacturing Hits 8-Month Low

ISM Manufacturing (SEP)
Actual: 52.0
Expected: 52.5
Previous: 52.9

ISM Manufacturing - Prices Paid (SEP)
Actual: 59.0
Expected: 62.0
Previous: 63.0

Conditions in the US manufacturing sector deteriorated during the month of September, as both new orders and production fell back. Furthermore, the prices paid component dropped for the fifth consecutive month to 59.0, signaling that inflation pressures have moderated somewhat. However, with energy and food prices rocketing higher, there are upside risks for the headline CPI readings for the month of September. Meanwhile, the employment component actually improved very slightly, which may lead traders to expect an optimistic non-farm payrolls report on Friday. Nevertheless, this particular indicator does not tend to forecast the NFP report very well, as the August readings showed a pick up in the ISM manufacturing employment index and an unexpectedly weak NFP figure of -4K.

The US Dollar has weakened slightly in the minutes following the release, with EUR/USD trading higher at 1.4232 while USD/CAD has edged down to 0.9931.