Wednesday, August 25, 2010

Regional Fed Manufacturing Surveys and the ISM PMI

by Bill McBride on 8/25/2010 03:05:00 PM

Yesterday, in a short preview of coming negative news, I mentioned that the Institute for Supply Management (ISM) PMI will be released next week (Wed, Sept 1st) - and that the ISM PMI will probably continue to decline based on the regional manufacturing reports.

Gavyn Davies at the Financial Times posted a graph of the New York and Philly Fed surveys compared to the ISM's PMI (ht Paulo). This was referenced in Davies' article: US economy is slowing more than the Fed has recognised

Below is a similar graph.

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image in new window.

For this graph I averaged the New York and Philly Fed surveys (dashed green), and averaged five surveys including New York, Philly, Richmond, Dallas and Kansas City (blue). The August Kansas City survey will be released tomorrow, and the August Dallas survey will be released on Monday, August 30th.

The PMI (red) is through July.

Based on the regional surveys so far, it appears that the PMI will decline further in August - but still be above 50 (indicating expansion in August).

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