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2 Jan 2015
US ISM disappoints, but job creation remains strong – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, explains that today’s US ISM Manufacturing release disappointed by coming out below than expectations at 55.5, but better employment numbers point towards a decent Labour Report in the coming week, anticipating wages to move higher and unemployment to fall further.
Key Quotes
“The ISM manufacturing index for December has come in at 55.5, down from 58.7 in November. This is disappointing given the consensus was 57.5 and follows the trend seen elsewhere around the world today. Nonetheless, it still suggests that the US economy is growing strongly, roughly at trend of around 3%, which is well above the rate seen in other mature developed economies.”
“The details show that production fell to 58.8 from 64.4 while new orders declined from 66.0 to 57.3 with net exports dropping to 52 from 55.5. There was better news on employment though, which rose to 56.8 from 54.9. This offers some hope that next week’s Labour Report should be decent. The current consensus is 240,000 versus the 321,000 outcome in November.”
“We also expect to see wages creep higher next week and the unemployment to fall further so the data remains consistent with very gradual Federal Reserve policy tightening later this year and ongoing dollar strength.”
Key Quotes
“The ISM manufacturing index for December has come in at 55.5, down from 58.7 in November. This is disappointing given the consensus was 57.5 and follows the trend seen elsewhere around the world today. Nonetheless, it still suggests that the US economy is growing strongly, roughly at trend of around 3%, which is well above the rate seen in other mature developed economies.”
“The details show that production fell to 58.8 from 64.4 while new orders declined from 66.0 to 57.3 with net exports dropping to 52 from 55.5. There was better news on employment though, which rose to 56.8 from 54.9. This offers some hope that next week’s Labour Report should be decent. The current consensus is 240,000 versus the 321,000 outcome in November.”
“We also expect to see wages creep higher next week and the unemployment to fall further so the data remains consistent with very gradual Federal Reserve policy tightening later this year and ongoing dollar strength.”