ISM Manufacturing data contracts in April for third month in a row. | CountingPips Forex & Currency Trading Blog

May 1, 2008 - Forex Economic News

ISM Manufacturing data contracts in April for third month in a row.

U.S. Manufacturing data, released today by the Institute for Supply Management, showed that manufacturing activity failed to grow in April for the third consecutive month. April's ISM Report On Business index readings for economic activity were at 48.6 percent, the same as March's 48.6 percent and slightly better than economic forecasts which expected a 48.0 percent reading. A score above 50 is considered to be growth and less than 50 is considered to be contraction in that sector. The report showed that the overall economy grew for the 78th straight month despite the manufacturing contraction.

Norbert J. Ore, chair of the ISM Business Survey Committee, stated in the report that, "The manufacturing sector failed to grow in April as the PMI fell below 50 percent for the third consecutive month. Manufacturers are in a situation where both new orders and production are slowly declining, but prices continue to rise at highly inflationary rates. Bright spots this month are the growth in the Backlog of Orders Index after six consecutive months of decline, continued strength in new export orders and a reduction in customers' inventories."

New orders, production, employment, inventories and imports showed contracting levels for April while supplier deliveries, prices and exports all showed growth for the month. Exports, getting a boost from a low U.S. dollar, are growing faster according to the report and have shown growth for 65 straight months while prices have also been growing faster for 16 straight months.

The U.S. dollar has been trading higher against its major currency counterparts today on speculation that after yesterday's interest rate reduction, the U.S. Fed may be done cutting rates in the short term. The dollar, after hitting an all time low against the euro on April 22nd at 1.6019, has been steadily gaining back value against the euro as it is trading at 1.5453 dollars per euro today. The dollar has also shown gains today verses the Canadian dollar(1.0205), British pound(1.9736), Swiss franc(1.0479), New Zealand dollar(0.7758) and Australian dollar(0.9325).

Tags: ism report on business, manufacturing, us dollar, economy, forex market

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